greed is good

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pages: 430 words: 109,064

13 Bankers: The Wall Street Takeover and the Next Financial Meltdown by Simon Johnson, James Kwak

American ideology, Andrei Shleifer, Asian financial crisis, asset-backed security, bank run, banking crisis, Bernie Madoff, Bonfire of the Vanities, bonus culture, break the buck, business cycle, buy and hold, capital controls, Carmen Reinhart, central bank independence, Charles Lindbergh, collapse of Lehman Brothers, collateralized debt obligation, commoditize, corporate governance, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, Edward Glaeser, Eugene Fama: efficient market hypothesis, financial deregulation, financial innovation, financial intermediation, financial repression, fixed income, George Akerlof, Gordon Gekko, greed is good, Home mortgage interest deduction, Hyman Minsky, income per capita, information asymmetry, interest rate derivative, interest rate swap, Kenneth Rogoff, laissez-faire capitalism, late fees, light touch regulation, Long Term Capital Management, market bubble, market fundamentalism, Martin Wolf, money market fund, moral hazard, mortgage tax deduction, Myron Scholes, Paul Samuelson, Ponzi scheme, price stability, profit maximization, race to the bottom, regulatory arbitrage, rent-seeking, Robert Bork, Robert Shiller, Robert Shiller, Ronald Reagan, Saturday Night Live, Satyajit Das, sovereign wealth fund, The Myth of the Rational Market, too big to fail, transaction costs, value at risk, yield curve

HG2491.J646 2010 332.10973—dc22 2010000168 eISBN: 978-0-307-37922-1 Author photographs © Anthony Armand Placet (Johnson) and courtesy of the author (Kwak) Cover photograph © Alex Ely/Getty Images www.vintagebooks.com v3.1 TO OUR FAMILIES They were careless people, Tom and Daisy—they smashed up things and creatures and then retreated back into their money or their vast carelessness, or whatever it was that kept them together, and let other people clean up the mess they had made. —F. Scott Fitzgerald, The Great Gatsby1 Contents Cover About the Author Other Books by This Author Title Page Copyright Dedication Introduction: 13 Bankers 1 Thomas Jefferson and the Financial Aristocracy 2 Other People’s Oligarchs 3 Wall Street Rising: 1980– 4 “Greed Is Good”: The Takeover 5 The Best Deal Ever 6 Too Big to Fail 7 The American Oligarchy: Six Banks Epilogue Notes Further Reading Acknowledgments INTRODUCTION 13 Bankers My administration is the only thing between you and the pitchforks. —Barack Obama, March 27, 20091 Friday, March 27, 2009, was a lovely day in Washington, D.C.—but not for the global economy. The U.S. stock market had fallen 40 percent in just seven months, while the U.S. economy had lost 4.1 million jobs.2 Total world output was shrinking for the first time since World War II.3 Despite three government bailouts, Citigroup stock was trading below $3 per share, about 95 percent down from its peak; stock in Bank of America, which had received two bailouts, had lost 85 percent of its value.

As Bianco put it, “What sets Salomon apart is the sheer scale on which it oper-ates in the markets, reflecting an appetite for risk unrivaled among financial middlemen.” Four years later, Liar’s Poker, Michael Lewis’s memoir of his years at Salomon, would cement its status as the paradigmatic bank of the 1980s, the same decade that produced the original Oliver Stone Wall Street movie, with Gordon Gekko’s famous “Greed is good” speech. Looking back, however, Salomon seems so … small. When the Business Week story was written, it had $68 billion in assets and $2.8 billion in shareholders’ equity. It expected to earn $1.1 billion in operating profits for all of 1985. The next year, Gutfreund earned $3.2 million.3 At the time, those numbers seemed extravagant. Today? Not so much. If the financial crisis of 2007–2009 produced a king of Wall Street, it would most likely be Jamie Dimon, CEO of JPMorgan Chase and the “Last Man Standing,” according to the title of a recent book.4 (Lloyd Blankfein of Goldman Sachs would be the other contender.)

Depending on the nature of their business, different parties prefer one type of risk or the other. * In the interest rate swap example above, the face value, or notional value, is $100 million. However, the amount of money that changes hands is much smaller; if, at the end of a given year, the floating rate is 7.25 percent, then the dealer only pays the company 0.25 percent (the difference between the floating and fixed rates), or $250,000. 4 “GREED IS GOOD” The Takeover Derivatives have been an extraordinarily useful vehicle to transfer risk from those who shouldn’t be taking it to those who are willing to and are capable of doing so.… The vast increase in the size of the over-the-counter derivatives markets is the result of the market finding them a very useful vehicle. —Alan Greenspan, chair of the Federal Reserve, July 16, 20031 The 1980s came to a close with the peak of the savings and loan crisis.


pages: 267 words: 70,250

Defending the Free Market: The Moral Case for a Free Economy by Robert A. Sirico

Affordable Care Act / Obamacare, barriers to entry, Berlin Wall, corporate governance, creative destruction, delayed gratification, Fall of the Berlin Wall, George Gilder, Gordon Gekko, greed is good, happiness index / gross national happiness, Hernando de Soto, informal economy, Internet Archive, liberation theology, means of production, moral hazard, obamacare, On the Revolutions of the Heavenly Spheres, profit motive, road to serfdom, zero-sum game

The greedy man under socialism can’t get rich by starting and nurturing a socially useful business. All he can do is become a thief or a cream-skimming government insider. Under capitalism, he has another option: he can excel in a socially useful business. In this way, capitalism provides the greedy person a socially beneficent alternative to exploitation. Remember villainous business executive Gordon Gekko in Oliver Stone’s 1987 film Wall Street? “Greed is good,” he claimed. Unfortunately, many real-life defenders of capitalism argue along the same lines. Greed, they claim, is the stimulant that drives the economy. And critics of the free market readily agree—they hate capitalism because they believe it fosters greed. I say a plague on both their houses. Greed isn’t good, and it isn’t the essence of capitalism. Greed is not necessary to the process of wealth creation in a capitalist economy.

Greed is known as one of the seven capital sins because greedy people will go to great lengths to obtain their object, committing other sins on the way to getting what they want—even to the point of using fellow human beings as instruments, as though they were not creatures with intrinsic value and dignity, ends in and of themselves rather than the mere means to another person’s wishes. The opposite of the greed-is-good error is the notion that desire of any kind is wrong. But the capacity to desire is actually a good thing that’s built in to the human condition. To desire to live better than our ancestors, to give our children a better life than we have had, to be more comfortable ourselves than in the past—these are not immoral things. They become morally problematic when material betterment becomes the whole end and focus of our lives, trumping the more important moral and spiritual goods.

He said that any time an industry fails in protecting its customers it injures trust in the whole industry—a negative outcome for everyone involved. This snapshot of Francois Michelin does not, of course, disprove the existence of unprincipled Gordon Gekkos in the world of high finance and enterprise. But there is nothing in business or the market economy that mandates a selfish dog-eat-dog ethic. The Apostle of Selfishness We began this chapter with Gordon Gekko announcing that greed is good. As he goes on to say to the shareholders of the fictional Teldar Paper Corporation, “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 U.S.A.”


pages: 486 words: 150,849

Evil Geniuses: The Unmaking of America: A Recent History by Kurt Andersen

affirmative action, Affordable Care Act / Obamacare, airline deregulation, airport security, always be closing, American ideology, American Legislative Exchange Council, anti-communist, Apple's 1984 Super Bowl advert, artificial general intelligence, autonomous vehicles, basic income, Bernie Sanders, blue-collar work, Bonfire of the Vanities, bonus culture, Burning Man, call centre, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, centre right, computer age, coronavirus, corporate governance, corporate raider, COVID-19, Covid-19, creative destruction, Credit Default Swap, cryptocurrency, deindustrialization, Donald Trump, Elon Musk, ending welfare as we know it, Erik Brynjolfsson, feminist movement, financial deregulation, financial innovation, Francis Fukuyama: the end of history, future of work, game design, George Gilder, Gordon Gekko, greed is good, High speed trading, hive mind, income inequality, industrial robot, interchangeable parts, invisible hand, Isaac Newton, James Watt: steam engine, Jane Jacobs, Jaron Lanier, Jeff Bezos, jitney, Joan Didion, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, knowledge worker, low skilled workers, Lyft, Mark Zuckerberg, market bubble, mass immigration, mass incarceration, Menlo Park, Naomi Klein, new economy, Norbert Wiener, Norman Mailer, obamacare, Peter Thiel, Picturephone, plutocrats, Plutocrats, post-industrial society, Powell Memorandum, pre–internet, Ralph Nader, Right to Buy, road to serfdom, Robert Bork, Robert Gordon, Robert Mercer, Ronald Reagan, Saturday Night Live, Seaside, Florida, Second Machine Age, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, Stewart Brand, strikebreaker, The Death and Life of Great American Cities, The Future of Employment, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Tim Cook: Apple, too big to fail, trickle-down economics, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, union organizing, universal basic income, Unsafe at Any Speed, urban planning, urban renewal, very high income, wage slave, Wall-E, War on Poverty, Whole Earth Catalog, winner-take-all economy, women in the workforce, working poor, young professional, éminence grise

—ANDY GROVE Contents Cover Title Page Copyright Epigraph Introduction Part One: A Brief History of America Chapter 1: Land of the New: America from 1600 to 1865 Chapter 2: Land of the New: An Economic History from the 1770s to the 1970s Chapter 3: Approaching Peak New: The 1960s Part Two: Turning Point Chapter 4: The 1970s: An Equal and Opposite Reaction Chapter 5: The 1970s: Liberalism Peaks and the Counterrevolution Begins Chapter 6: The 1970s: Building the Counter-Establishment Chapter 7: The 1970s: From a Bicentennial Pageant to a Presidency Chapter 8: The 1970s: Neoliberal Useful Idiots Part Three: Wrong Turn Chapter 9: The Reagan Revolution Chapter 10: Raw Deal: What Happened in the 1980s Didn’t Stay in the 1980s Chapter 11: The Rule of Law Chapter 12: The Deregulation Generation Chapter 13: The Culture of Greed Is Good Chapter 14: How Wall Street Ate America Chapter 15: Workers of the New World, You Lose Chapter 16: Insecurity Is a Feature, Not a Bug Chapter 17: Socially Liberal, Fiscally Conservative, Generally Complacent Chapter 18: The Permanent Reagan Revolution Chapter 19: The 1990s: Restrained and Reckless Part Four: Same Old Same Old Chapter 20: Rewind, Pause, Stop: The End of the New Chapter 21: The Politics of Nostalgia and Stagnation Since the 1990s Chapter 22: Ruthless Beats Reasonable Chapter 23: Winners and Losers in the Class War Chapter 24: American Exceptionalism Part Five: Make America New Again Chapter 25: Winners and Losers (So Far) in the Digital Revolution Chapter 26: How the Future Will Work Chapter 27: This Strategic Inflection Point Chapter 28: What Is to Be Done?

In the evolving American social contract, the balance among the competing demands of liberty and equality and solidarity (or fraternité) worked pretty well for most of the twentieth century, the arc bending toward justice. But then came the ultra-individualistic frenzy of the 1960s, and during the 1970s and ’80s, liberty assumed its powerfully politicized form and eclipsed equality and solidarity among our aspirational values. Greed is good meant that selfishness lost its stigma. And that was when we were in trouble. The best test of a morally legitimate social contract is a thought experiment that the philosopher John Rawls named the Veil of Ignorance in 1971, just as modern American ultra-individualism exploded. The idea is to imagine you know nothing of your actual personal circumstances—wealth, abilities, education, race, ethnicity, gender, age; all those salient facts are veiled from you.

A problem with leveraged buyouts and other private equity takeovers, and with financialization in general, is that so often the main point isn’t to create enterprises of lasting value, enabling particular businesses (or American capitalism or American citizens) to prosper for the long term. It is to obtain those fees, the vigorish, and to score by making this deal, and then another deal, and another, because greed is good, kill them all, and let the invisible hand sort it out. As I was beginning this book in 2017, I noticed that big, familiar retail chains were all going under—Toys “R” Us, Payless, The Limited, Gymboree, and many more. Then I noticed that each of them had been subjected to a leveraged buyout, finally choked and smothered by debt piled on by temporary private equity owners. The list of solid, profitable American companies unnecessarily wrecked this way since then is extremely long.


pages: 1,205 words: 308,891

Bourgeois Dignity: Why Economics Can't Explain the Modern World by Deirdre N. McCloskey

Airbnb, Akira Okazaki, big-box store, Black Swan, book scanning, British Empire, business cycle, buy low sell high, Capital in the Twenty-First Century by Thomas Piketty, clean water, Columbian Exchange, conceptual framework, correlation does not imply causation, Costa Concordia, creative destruction, crony capitalism, dark matter, Dava Sobel, David Graeber, David Ricardo: comparative advantage, deindustrialization, demographic transition, Deng Xiaoping, Donald Trump, double entry bookkeeping, en.wikipedia.org, epigenetics, Erik Brynjolfsson, experimental economics, Ferguson, Missouri, fundamental attribution error, Georg Cantor, George Akerlof, George Gilder, germ theory of disease, Gini coefficient, God and Mammon, greed is good, Gunnar Myrdal, Hans Rosling, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, Hernando de Soto, immigration reform, income inequality, interchangeable parts, invention of agriculture, invention of writing, invisible hand, Isaac Newton, Islamic Golden Age, James Watt: steam engine, Jane Jacobs, John Harrison: Longitude, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Arrow, knowledge economy, labor-force participation, lake wobegon effect, land reform, liberation theology, lone genius, Lyft, Mahatma Gandhi, Mark Zuckerberg, market fundamentalism, means of production, Naomi Klein, new economy, North Sea oil, Occupy movement, open economy, out of africa, Pareto efficiency, Paul Samuelson, Pax Mongolica, Peace of Westphalia, peak oil, Peter Singer: altruism, Philip Mirowski, pink-collar, plutocrats, Plutocrats, positional goods, profit maximization, profit motive, purchasing power parity, race to the bottom, refrigerator car, rent control, rent-seeking, Republic of Letters, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Scientific racism, Scramble for Africa, Second Machine Age, secular stagnation, Simon Kuznets, Social Responsibility of Business Is to Increase Its Profits, spinning jenny, stakhanovite, Steve Jobs, The Chicago School, The Market for Lemons, the rule of 72, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, total factor productivity, Toyota Production System, transaction costs, transatlantic slave trade, Tyler Cowen: Great Stagnation, uber lyft, union organizing, very high income, wage slave, Washington Consensus, working poor, Yogi Berra

The son of a freed slave, Horace adopted the social attitudes of his acquired knightly rank. Still today, as always, trade and betterment are threatened by the scorn of priest, knight, gentleman, poet, or thug, from Green to neo-Nazi. And now too they are threatened from within the bourgeoisie itself by a foolish pride—pride, the master sin against the Holy Spirit—that elevates trading prudence to the exclusion of other virtues. The threat appears as the crudely “neoliberal,” “greed-is-good” theory of behavior, encouraged by some economists and by all inside traders. The theory is the modern descendant of the Machiavellian moment of Il Principe and then the Hobbesian-Mandevillean-Benthamite notion that it’s enough to have prudence only—the restless stirring for gain, utility, self-interest.30 But profit maximization is not in itself an ethic. It is prudence only, elevating one of the seven principal virtues into the only one.

For example: “What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom.”8 But in his other published book one can find hundreds of pages in praise also of other virtues, especially temperance or, in the unpublished Lectures on Jurisprudence, justice. And even in the Wealth of Nations, I have noted, unless one is precommitted to seeing its implied hero as merely a confused precursor to Karl Marx’s Mister Money Bags or Paul Samuelson’s Max U, one can find a good deal of ethical judgment more grown-up than “prudence suffices” or “greed is good.”9 “Max U,” remember, is a little joke, referring to the Maximization of Utility under Constraints that Samuelson laid down as the monopolistic principle of modeling in economics in his modestly entitled PhD dissertation and then book, Foundations of Economic Analysis (1947). Max (such a man, I venture to say, would be more sensible if he became Maxine) is literally a sociopath, reducing every experience to his own pleasure.

Smith in the Theory did not believe, as his teacher Hutcheson did, that in achieving social peace and prosperity we can depend on natural benevolence—we would call it genetically hardwired cooperation (for which, by the way, in case you don’t believe the evidence of four millennia of poetry, drama, religion, novels, proverbs, folktales, philosophy, theology, and history, there is by now a good deal of recently gathered positivistic experimental and observational evidence). Nor did he believe, as many economists still understand him to do, in a fuzzy version of Mandeville’s hardwired opposite of cooperation, a macho competiveness, greed is good. Against inherited niceness or nastiness, as I have noted, Smith repeatedly emphasized in The Theory of Moral Sentiments, as he did also in The Wealth of Nations, that during their lives people change, shaped by society and, it may be, by their own impartial spectator. In the phrase appropriate to a time of apprenticeships, people were “brought up to a trade.” They started the same, said Smith the radical egalitarian.


pages: 498 words: 145,708

Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole by Benjamin R. Barber

addicted to oil, AltaVista, American ideology, Berlin Wall, Bertrand Russell: In Praise of Idleness, Bill Gates: Altair 8800, business cycle, Celebration, Florida, collective bargaining, creative destruction, David Brooks, delayed gratification, Donald Trump, double entry bookkeeping, G4S, game design, George Gilder, Gordon Gekko, greed is good, Hernando de Soto, illegal immigration, informal economy, invisible hand, Joseph Schumpeter, laissez-faire capitalism, late capitalism, liberal capitalism, Marc Andreessen, McJob, microcredit, Naomi Klein, new economy, New Journalism, Norbert Wiener, nuclear winter, Panopticon Jeremy Bentham, pattern recognition, presumed consent, profit motive, race to the bottom, Ralph Nader, road to serfdom, Robert Bork, Ronald Reagan, Saturday Night Live, Silicon Valley, spice trade, Steve Jobs, telemarketer, The Fortune at the Bottom of the Pyramid, the market place, The Wisdom of Crowds, Thomas L Friedman, Thorstein Veblen, trade route, X Prize

Indeed, Gilder seems quite prescient inasmuch as his moralization of private profit and corporate self-interest captures perfectly not only televangelism’s compromise with materialism, but the spirit of President Bush’s successful campaign strategy in 2004 when he managed to keep piety and profits in the same fold, convincing evangelicals that big-time global capitalism was their best friend and persuading capitalists that they had nothing to fear from anti-materialist Christian fundamentalism. In Canada, the Vancouver Sun newspaper—Vancouver’s largest, most popular daily—published an op-ed on the ethics of shopping titled “Shop till you drop: It’s a moral imperative.”17 Nonetheless, Gilder did not realize that the capitalism he beatified had changed. He confounded late consumer capitalism and what he saw as its celebration of altruistic avarice (greed is good!) with early entrepreneurial capitalism and its celebration of altruistic asceticism (work is holy!). Gilder was singing hymns to saving and investing, while Christians were busy spending and consuming. He applauded the virtue of inventiveness and capital creation, while it was the virtue of product-less mergers and acquisitions and need-generating marketing and branding that were defining the new spirit of consumerism.

Selfishness no longer cloaks itself in religion: it has become religion. Greed is not merely good for me. The new ethos wants us to believe it is good in itself. This postmodern consumer-capitalist gospel is precisely the one found in the proliferating “how-to” texts of today’s consumerist canon where being rich is defined by spending heartily, and conspicuous consumption is no longer a vice but a virtue. Jonathan Hoenig’s book Greed Is Good, whose title is borrowed from Stone’s film, is an example, carrying the whimsical but telling subtitle The Capitalist Pig Guide to Investing. Hoenig counsels investors to accept that while “greed has been much maligned in our culture…[i]n the game called life, the object is to make yourself happy.” Where Weber’s early capitalism was a mechanism that gave others what they wanted and needed, Hoenig understands that “greed is the mechanism to get what you want.”25 Yet Hoenig, as cynical and self-mocking a guru as you will find, proposes a “Capitalist Pig Credo” whose “capitalist pig philosophy is not simply about getting rich.

(the largest carpet manufacturer in the world which has committed to using only reusable or recycled materials), and Starbucks have all grasped the civic possibilities of marketing along with the marketing possibilities of charitable giving. Corporations understand that good citizenship pays, and that modifying their products and practices in order to attract customers who may otherwise avoid them or seek out rivals is not only a prudent civic practice but good business as well. Their motive may be greed, but that’s the point: greed is good in this domain, not because the greedy are posturing narcissists like Michael Douglas’s character in the movie of that name, but because greed can be made an engine of responsible social service, allowing producers to make a profit when they respond to socially responsible demands by consumers. Buying bottled water can rescue African children from thirst. Using your credit card can help you save responsibly (pennies in your savings account for every dollar you spend).


pages: 362 words: 108,359

The Accidental Investment Banker: Inside the Decade That Transformed Wall Street by Jonathan A. Knee

barriers to entry, Boycotts of Israel, call centre, cognitive dissonance, commoditize, corporate governance, Corrections Corporation of America, discounted cash flows, fear of failure, fixed income, greed is good, if you build it, they will come, iterative process, market bubble, market clearing, Menlo Park, new economy, Ponzi scheme, pre–internet, risk/return, Ronald Reagan, shareholder value, Silicon Valley, technology bubble, young professional, éminence grise

The Internet suddenly became the quickest way to become a gazillionaire. Why should we be surprised that bankers fell all over each other on the way out of one set of doors and through the other? To be fair, some version of this explanation is by far the most popular not only among the general public, but also among bankers themselves. Yet there is something unsatisfactory about this theory—let’s call it the Greed is Good theory after the famous Michael Douglas line from Oliver Stone’s Wall Street. If the theory were true, it would suggest one could simply get bankers to stay by paying them more. And this is precisely what the major investment banks tried to do. They began gingerly with a variety of “quality-of-life” initiatives that tried to emulate the imagined work environment at Internet companies. They instituted casual dress year round, after escalating in stages from casual summer Fridays, a move viewed as revolutionary at the time.

Luckily, the unique compensation arrangements surrounding Goldman Sachs’ own IPO in 1999 do allow us to draw some conclusions regarding the impact of the pure greed factor. All Goldman Sachs employees received significant stock grants at the time of the IPO that would be forfeited if they left the firm within three years. The incremental compensation plans of other banks, no matter how generous, were no more than a fraction of the payoff that the Goldman IPO represented to those who stayed with the firm. If the Greed is Good theory were true, one would have expected dramatically lower personnel turnover at Goldman Sachs— even ignoring that Goldman has had lower historic turnover anyway. But Goldman experienced the same attrition rates as its peers. This happened despite the fact that Goldman had instituted one of the more generous incremental compensation plans (on top of the IPO stock distribution) to stem the exodus of bankers.

Although Goldman’s competitors were undoubtedly tempted to gloat, any gloating likely turned quickly to horror. For if Goldman couldn’t hang on to its people by using the stick of taking back its IPO largesse, how could others ever afford a carrot big enough to do the job? What can explain the odd group dynamic that first drew these over-achievers to banking and then to the Internet? At the time, I groped for a theory less simplistic than Greed Is Good but more persuasive than, say, mass hysteria. Surprisingly, I stumbled onto a clue in the journey of personal self-discovery embarked on by Al Gore, who then was in the midst of his unsuccessful quest to succeed Bill Clinton as president of the United States. After his disastrous 1988 presidential run and his son’s near-fatal car crash, Al Gore had a midlife crisis. He undertook an intensive study of family dysfunction, enlisting the help of a University of Tennessee clinical psychologist who supplied the reading materials.


pages: 287 words: 80,050

The Wisdom of Frugality: Why Less Is More - More or Less by Emrys Westacott

Airbnb, back-to-the-land, Bertrand Russell: In Praise of Idleness, Bonfire of the Vanities, carbon footprint, clean water, Community Supported Agriculture, corporate raider, Daniel Kahneman / Amos Tversky, dark matter, Diane Coyle, discovery of DNA, Downton Abbey, dumpster diving, financial independence, full employment, greed is good, happiness index / gross national happiness, haute cuisine, hedonic treadmill, income inequality, invisible hand, Isaac Newton, loss aversion, McMansion, means of production, move fast and break things, move fast and break things, negative equity, New Urbanism, paradox of thrift, Ralph Waldo Emerson, Thales and the olive presses, Thales of Miletus, the market place, The Spirit Level, Thorstein Veblen, Upton Sinclair, Veblen good, Zipcar

Even though Paul McCartney’s conventional platitude carried a whiff of irony, especially given his experience of sudden fame and fortune, while McCoy’s song goes on to imagine ways in which he will use his wealth to benefit others, the contrast here does seem to suggest a shift in cultural attitudes. Even so, when in the 1987 film Wall Street the real estate speculator and corporate raider Gordon Gecko declares that “greed is good,” we the audience understand by convention that the man who says this is bad; and we are duly satisfied when, at the end of the film, we see the bad man who says that greed is good carted off to prison. It seems that our culture is still torn between accepting acquisitiveness as a necessary condition of economic growth and denouncing it as an undesirable character trait that bespeaks false values and encourages unethical conduct. CHAPTER 5 The Pros and Cons of Extravagance When [Aristippus] was reproached for living extravagantly, he replied, “If extravagance had been a fault, it would not have had a place at the festivals of the Gods.”1 Here are a few synonyms for “extravagant”: liberal ostentatious imprudent wasteful magnificent flashy improvident unnecessary lavish showy immoderate reckless costly extortionate excessive foolish unrestrained profligate dissipated prodigal superfluous As with the synonyms for “simple” and “frugal,” some of these are value neutral, others carry normative force.


pages: 310 words: 85,995

The Future of Capitalism: Facing the New Anxieties by Paul Collier

"Robert Solow", accounting loophole / creative accounting, Airbnb, assortative mating, bank run, Berlin Wall, Bernie Sanders, bitcoin, Bob Geldof, bonus culture, business cycle, call centre, central bank independence, centre right, Commodity Super-Cycle, computerized trading, corporate governance, creative destruction, cuban missile crisis, David Brooks, delayed gratification, deskilling, Donald Trump, eurozone crisis, financial deregulation, full employment, George Akerlof, Goldman Sachs: Vampire Squid, greed is good, income inequality, industrial cluster, information asymmetry, intangible asset, Jean Tirole, job satisfaction, Joseph Schumpeter, knowledge economy, late capitalism, loss aversion, Mark Zuckerberg, minimum wage unemployment, moral hazard, negative equity, New Urbanism, Northern Rock, offshore financial centre, out of africa, Peace of Westphalia, principal–agent problem, race to the bottom, rent control, rent-seeking, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, Silicon Valley, Silicon Valley ideology, sovereign wealth fund, The Wealth of Nations by Adam Smith, theory of mind, too big to fail, trade liberalization, urban planning, web of trust, zero-sum game

Part Two of this book sets out the ethical foundations upon which these solutions rest; while Part Three is about practical solutions to our widening social divisions. This chapter explores how our morals are linked to our emotions, how they evolve, and how things can go wrong.1 WANTS AND ‘OUGHTS’ The glib supporters of capitalism who argue that the end justifies the means invoke Adam Smith’s famous proposition in The Wealth of Nations that the pursuit of self-interest leads to the common good. ‘Greed is good’ became the intellectual underpinning for the zeal of the Reagan–Thatcher revolution. Smith’s proposition is a valuable corrective to the naïve notion that an action is good only if well-motivated. But modern economics, which The Wealth of Nations launched in 1776, is built on a character who is utterly despicable. Economic man is selfish, greedy and lazy. Such people do exist and you will meet some of them.

As a belief system, it is internally coherent, and so stable; each individual component viewed in isolation is so repellent that it creates a gulf between the group and everyone else, strengthening group identity. ISIS used narratives strategically to take societies back to the twelfth century. Our leaders could use them to better purpose. SOFTWIRED OBLIGATIONS We started with the moral deficit facing modern capitalism: a society can do without morality because self-interest will get us to the nirvana of mass prosperity. ‘Greed is good’ because the stronger the appetite, the harder will people work, and so the more prosperous we will all become. We have come a long way from that proposition. We are social beings, neither economic man, nor altruistic saints. We crave esteem and belonging, and these underpin our moral values. Around the world we hold six such values in common, none of which is generated by reason. Care and liberty may be evolutionarily primitive.


Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America by Matt Taibbi

addicted to oil, affirmative action, Affordable Care Act / Obamacare, Bernie Sanders, Bretton Woods, buy and hold, carried interest, clean water, collateralized debt obligation, collective bargaining, computerized trading, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, David Brooks, desegregation, diversification, diversified portfolio, Donald Trump, financial innovation, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, illegal immigration, interest rate swap, laissez-faire capitalism, London Interbank Offered Rate, Long Term Capital Management, margin call, market bubble, medical malpractice, money market fund, moral hazard, mortgage debt, obamacare, passive investing, Ponzi scheme, prediction markets, quantitative easing, reserve currency, Ronald Reagan, Sergey Aleynikov, short selling, sovereign wealth fund, too big to fail, trickle-down economics, Y2K, Yom Kippur War

One is that voters on both sides of the aisle are gradually weaned off that habit of having real expectations for their politicians, consuming the voting process entirely as culture-war entertainment. The other is that millions of tenuously middle-class voters are conned into pushing Wall Street’s own twisted greed ethos as though it were their own. The Tea Party, with its weirdly binary view of society as being split up cleanly into competing groups of producers and parasites—that’s just a cultural echo of the insane greed-is-good belief system on Wall Street that’s provided the foundation/excuse for a generation of brilliantly complex thievery. Those beliefs have trickled down to the ex-middle-class suckers struggling to stay on top of their mortgages and their credit card bills, and the real joke is that these voters listen to CNBC and Fox and they genuinely believe they’re the producers in this binary narrative. They don’t get that somewhere way up above, there’s a group of people who’ve been living the Atlas dream for real—and building a self-dealing financial bureaucracy in their own insane image. 2 The Biggest Asshole in the Universe BAD POLITICAL SYSTEMS on their own don’t always make societies fail.

A being who does not hold his own life as the motive and goal of his actions, is acting on the motive and standard of death. Such a being is a metaphysical monstrosity, struggling to oppose, negate and contradict the fact of his own existence, running blindly amuck on a trail of destruction, capable of nothing but pain. This is pure social Darwinism: self-interest is moral, interference (particularly governmental interference) with self-interest is evil, a fancy version of the Gordon Gekko pabulum that “greed is good.” When you dig deeper into Rand’s philosophy, you keep coming up with more of the same. Rand’s belief system is typically broken down into four parts: metaphysics (objective reality), epistemology (reason), ethics (self-interest), and politics (capitalism). The first two parts are basically pure bullshit and fluff. According to objectivists, the belief in “objective reality” means that “facts are facts” and “wishing” won’t make facts change.


pages: 561 words: 157,589

WTF?: What's the Future and Why It's Up to Us by Tim O'Reilly

4chan, Affordable Care Act / Obamacare, Airbnb, Alvin Roth, Amazon Mechanical Turk, Amazon Web Services, artificial general intelligence, augmented reality, autonomous vehicles, barriers to entry, basic income, Bernie Madoff, Bernie Sanders, Bill Joy: nanobots, bitcoin, blockchain, Bretton Woods, Brewster Kahle, British Empire, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, Captain Sullenberger Hudson, Chuck Templeton: OpenTable:, Clayton Christensen, clean water, cloud computing, cognitive dissonance, collateralized debt obligation, commoditize, computer vision, corporate governance, corporate raider, creative destruction, crowdsourcing, Danny Hillis, data acquisition, deskilling, DevOps, Donald Davies, Donald Trump, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Filter Bubble, Firefox, Flash crash, full employment, future of work, George Akerlof, gig economy, glass ceiling, Google Glasses, Gordon Gekko, gravity well, greed is good, Guido van Rossum, High speed trading, hiring and firing, Home mortgage interest deduction, Hyperloop, income inequality, index fund, informal economy, information asymmetry, Internet Archive, Internet of things, invention of movable type, invisible hand, iterative process, Jaron Lanier, Jeff Bezos, jitney, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kevin Kelly, Khan Academy, Kickstarter, knowledge worker, Kodak vs Instagram, Lao Tzu, Larry Wall, Lean Startup, Leonard Kleinrock, Lyft, Marc Andreessen, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, McMansion, microbiome, microservices, minimum viable product, mortgage tax deduction, move fast and break things, move fast and break things, Network effects, new economy, Nicholas Carr, obamacare, Oculus Rift, packet switching, PageRank, pattern recognition, Paul Buchheit, peer-to-peer, peer-to-peer model, Ponzi scheme, race to the bottom, Ralph Nader, randomized controlled trial, RFC: Request For Comment, Richard Feynman, Richard Stallman, ride hailing / ride sharing, Robert Gordon, Robert Metcalfe, Ronald Coase, Sam Altman, school choice, Second Machine Age, secular stagnation, self-driving car, SETI@home, shareholder value, Silicon Valley, Silicon Valley startup, skunkworks, Skype, smart contracts, Snapchat, Social Responsibility of Business Is to Increase Its Profits, social web, software as a service, software patent, spectrum auction, speech recognition, Stephen Hawking, Steve Ballmer, Steve Jobs, Steven Levy, Stewart Brand, strong AI, TaskRabbit, telepresence, the built environment, The Future of Employment, the map is not the territory, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Davenport, transaction costs, transcontinental railway, transportation-network company, Travis Kalanick, trickle-down economics, Uber and Lyft, Uber for X, uber lyft, ubercab, universal basic income, US Airways Flight 1549, VA Linux, Watson beat the top human players on Jeopardy!, We are the 99%, web application, Whole Earth Catalog, winner-take-all economy, women in the workforce, Y Combinator, yellow journalism, zero-sum game, Zipcar

After World War II, we invested in them and raised them up again. After World War I, the United States beggared its returning veterans. After World War II, we sent them to college. Wartime technologies such as digital computing were put into the public domain so that they could be transformed into the stuff of the future. The rich taxed themselves to finance the public good. In the 1980s, though, the idea that “greed is good” took hold in the United States and we turned away from prosperity. We accepted the idea that what was good for financial markets was good for everyone and structured our economy to drive stock prices ever higher, convincing ourselves that “the market” of stocks, bonds, and derivatives was the same as Adam Smith’s market of real goods and services exchanged by ordinary people. We hollowed out the real economy, putting people out of work and capping their wages in service to corporate profits that went to a smaller and smaller slice of society.

Yes, the market is increasingly made of complex financial derivatives that no human can truly understand. But the key lesson is one we have seen again and again. The design of a system determines its outcomes. The robots did not force a human-hostile future upon us; we chose it ourselves. The 1980s were the years of “corporate raiders” celebrated by Michael Douglas’s character, Gordon Gekko, in the 1987 movie Wall Street, who so memorably said, “Greed is good.” The theory was that by discovering and rooting out bad managers and finding efficiencies in underperforming businesses, these raiders were actually improving the operation of the capitalist system. It is certainly true that in some cases they played that role. But by elevating the single fitness function of increasing share price above all else, they hollowed out our overall economy. The preferred tool of choice has become stock buybacks, which, by reducing the number of shares outstanding, raise the earnings per share, and thus the stock price.

See also regulations government as a platform, 133–35, 149–50 Code for America, 138–44, 147, 148–49, 187, 222 and elites understanding technology, 146 federal government, 147 Gov 2.0 Summit and Expo, 128–31 healthcare.gov crisis, 118–19, 146 local governments, 138–42 need for reinvention of applications, 143 NSF Digital Library Program, 132 R&D grants, 132 requirements for, 135–37 “Government Data and the Invisible Hand” (Robinson, et. al), 130 Government Digital Service, United Kingdom (UK GDS), 144–45, 168–69 GPL (GNU Public License), 25 GPS, 83–84, 131, 176–77 Gray, Mary, 166 “greed is good” choice in 1980s, xxv Green, Hank, 289, 316 Green, Logan, 77, 183 Green Bay Packers, 244 Green Mars (Robinson), 96 Griffith, Saul, 66, 326–27, 363–64 Grossman, Nick, 189 Guardian, 214 Guarino, Dave, 141–43 Hagel, John, III, 341 Hagiu, Andrei, 196 Ha-Joon Chang, 134 Haldane, Andrew, 175 Halevy, Alon, 155–56 Hammerbacher, Jeff, 156, 169 Hanauer, Nick, 196, 250, 257, 264–65, 267, 268, 300, 368–69 Hanrahan, Jim, 43 Haque, Umair, 248–49 “Hardware, Software, and Infoware” (O’Reilly), 9–11, 13–14 “Harnessing Collective Intelligence” vector, 37–40 Harvard Business Review, 24, 156, 196, 204 Hassabis, Demis, 167, 234 healthcare.gov, 118–19, 146 Hedlund, Mark, 287 Herbert, Frank, 76 Hewlett-Packard (HP), 79 Hickey, Dave, 313 Hidden Figures (film), 301 Hill, Steven, 184, 196 Hillaker, Harry, 209 Hillis, Danny, 44 HITs (Human Intelligence Tasks), 166 Hoffman, Reid, 36 Hoffman’s Law, 36–37 Honor, 332–33 Hooke’s Law, 327 Hotwired (online magazine), 81 household debt, xxi Howard, Jeremy, 168 Hsiang, Mina, 148 Huber, Jeff, 353–54 Hugo, Victor, 355 Humans of New York (Stanton), 370–71 Human Spectrogram, 222 Huxley, Thomas Henry, 44 Hwang, Tim, 332 hybrid artificial intelligence, 234–36 IBM, 11–12, 136 idea meritocracy, 223 Ignorance (Firestein), 340 Immelt, Jeff, 303 independent contractors, 190–92 indie.vc model, 286 industrial revolution, xxiv Inequality for All (documentary film), 265 inflation, 239 information, 66–67, 89.


pages: 97 words: 31,550

Money: Vintage Minis by Yuval Noah Harari

23andMe, agricultural Revolution, algorithmic trading, Anne Wojcicki, autonomous vehicles, British Empire, call centre, credit crunch, European colonialism, Flash crash, greed is good, job automation, joint-stock company, joint-stock limited liability company, lifelogging, pattern recognition, Ponzi scheme, self-driving car, telemarketer, The Future of Employment, The Wealth of Nations by Adam Smith, trade route, transatlantic slave trade, Watson beat the top human players on Jeopardy!, zero-sum game

This may not strike you as very original, because we all live in a capitalist world that takes Smith’s argument for granted. We hear variations on this theme every day in the news. Yet Smith’s claim that the selfish human urge to increase private profits is the basis for collective wealth is one of the most revolutionary ideas in human history – revolutionary not just from an economic perspective, but even more so from a moral and political perspective. What Smith says is, in fact, that greed is good, and that by becoming richer I benefit everybody, not just myself. Egoism is altruism. Smith taught people to think about the economy as a ‘win-win situation’, in which my profits are also your profits. Not only can we both enjoy a bigger slice of pie at the same time, but the increase in your slice depends upon the increase in my slice. If I am poor, you too will be poor since I cannot buy your products or services.


pages: 274 words: 93,758

Phishing for Phools: The Economics of Manipulation and Deception by George A. Akerlof, Robert J. Shiller, Stanley B Resor Professor Of Economics Robert J Shiller

"Robert Solow", Andrei Shleifer, asset-backed security, Bernie Madoff, business cycle, Capital in the Twenty-First Century by Thomas Piketty, collapse of Lehman Brothers, corporate raider, Credit Default Swap, Daniel Kahneman / Amos Tversky, dark matter, David Brooks, desegregation, en.wikipedia.org, endowment effect, equity premium, financial intermediation, financial thriller, fixed income, full employment, George Akerlof, greed is good, income per capita, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Arrow, Kenneth Rogoff, late fees, loss aversion, market bubble, Menlo Park, mental accounting, Milgram experiment, money market fund, moral hazard, new economy, Pareto efficiency, Paul Samuelson, payday loans, Ponzi scheme, profit motive, publication bias, Ralph Nader, randomized controlled trial, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, short selling, Silicon Valley, the new new thing, The Predators' Ball, the scientific method, The Wealth of Nations by Adam Smith, theory of mind, Thorstein Veblen, too big to fail, transaction costs, Unsafe at Any Speed, Upton Sinclair, Vanguard fund, Vilfredo Pareto, wage slave

Jensen, “Takeovers: Their Causes and Consequences,” Journal of Economic Perspectives 2, no. 1 (Winter 1988): 21–48. 29. This opposite side of the coin has been argued in Andrei Shleifer and Lawrence H. Summers, “Breach of Trust in Hostile Takeovers,” in Corporate Takeovers: Causes and Consequences, ed. Alan J. Auerbach (Chicago: University of Chicago Press, 1988), pp. 33–68. 30. Brian Hindo and Moira Herbst, “Personal Best Timeline, 1986: ‘Greed Is Good,’” BusinessWeek, http://www.bloomberg.com/ss/06/08/personalbest_timeline/source/7.htm. 31. Bruck, The Predators’ Ball, p. 320. 32. Bruck, The Predators’ Ball. 33. FDIC v. Milken, pp. 70–71. 34. Alison Leigh Cowan, “F.D.I.C. Backs Deal by Milken,” New York Times, March 10, 1992. 35. See Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2014), p. 291, fig. 8.5, and p. 292, fig. 8.6. 36.

Berkeley: University of California Press, 2012. Hennessey, Ray. “The 15 Ronald Reagan Quotes Every Business Leader Must Know.” Accessed January 16, 2015. http://www.entrepreneur.com/article/234547. Hickman, W. Braddock. Corporate Bond Quality and Investor Experience. Princeton: National Bureau of Economic Research and Princeton University Press, 1958. Hindo, Brian, and Moira Herbst. “Personal Best Timeline, 1986: ‘Greed Is Good.’” BusinessWeek. http://www.bloomberg.com/ss/06/08/personalbest_timeline/source/7.htm. Hirschman, Elizabeth C. “Differences in Consumer Purchase Behavior by Credit Card Payment System.” Journal of Consumer Research 6, no. 1 (June 1979): 58–66. “History in Review: What Really Happened to the Shah of Iran.” Accessed December 1, 2014. http://www.iransara.info/Iran%20what%20happened%20to%20Shah.htm.


pages: 380 words: 109,724

Don't Be Evil: How Big Tech Betrayed Its Founding Principles--And All of US by Rana Foroohar

"side hustle", accounting loophole / creative accounting, Airbnb, AltaVista, autonomous vehicles, banking crisis, barriers to entry, Bernie Madoff, Bernie Sanders, bitcoin, book scanning, Brewster Kahle, Burning Man, call centre, cashless society, cleantech, cloud computing, cognitive dissonance, Colonization of Mars, computer age, corporate governance, creative destruction, Credit Default Swap, cryptocurrency, data is the new oil, death of newspapers, Deng Xiaoping, disintermediation, don't be evil, Donald Trump, drone strike, Edward Snowden, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Etonian, Filter Bubble, future of work, game design, gig economy, global supply chain, Gordon Gekko, greed is good, income inequality, informal economy, information asymmetry, intangible asset, Internet Archive, Internet of things, invisible hand, Jaron Lanier, Jeff Bezos, job automation, job satisfaction, Kenneth Rogoff, life extension, light touch regulation, Lyft, Mark Zuckerberg, Marshall McLuhan, Martin Wolf, Menlo Park, move fast and break things, move fast and break things, Network effects, new economy, offshore financial centre, PageRank, patent troll, paypal mafia, Peter Thiel, pets.com, price discrimination, profit maximization, race to the bottom, recommendation engine, ride hailing / ride sharing, Robert Bork, Sand Hill Road, search engine result page, self-driving car, shareholder value, sharing economy, Shoshana Zuboff, Silicon Valley, Silicon Valley startup, smart cities, Snapchat, South China Sea, sovereign wealth fund, Steve Jobs, Steven Levy, subscription business, supply-chain management, TaskRabbit, Telecommunications Act of 1996, The Chicago School, the new new thing, Tim Cook: Apple, too big to fail, Travis Kalanick, trickle-down economics, Uber and Lyft, Uber for X, uber lyft, Upton Sinclair, WikiLeaks, zero-sum game

Silicon Valley has always had a core Ayn Rand libertarianism underneath its hippie patina: It justifies their sense of freedom from any costly social responsibility for the downsides of their products and services. As Jonathan Taplin, Jaron Lanier, and other Silicon Valley critics have written, the tech titans may tend to vote left, but the strong libertarian bias in digital culture cuts right. Theirs is an eighties-style “Greed is good” ethos overlaid with the contempt of a youthful generation of CEOs who’ve never seen government do anything much more ambitious than cut taxes. All of this has resulted in a self-interested and shortsighted “disrupt everything” mentality. It’s much easier, of course, to break things than to fix them. The New Monopolists: Big Tech and Its Economic Implications In my nearly three decades of business journalism, I’ve learned one investigative rule: Follow the money.

Neoliberalism on Steroids As powerful as the network effect is, to understand the seemingly unstoppable growth of the platform companies like Google or Facebook, you also have to look at how much the politics of Silicon Valley changed between the era of hippie idealism represented by Steve Jobs, and the libertarian epoch of Peter Thiel and his ilk. “It was a titanic shift,” says Roger McNamee, who has worked in tech for more than forty years. “While the rank and file in Silicon Valley is liberal, the top people at the top firms tend to believe that greed is good.” How could they not? Ever since the 1980s, most of American business has been subscribing to the trickle-down “markets know best” doctrine popularized by the so-called Chicago School of economics. The Internet platforms in particular have benefited enormously from the Chicago School’s antitrust philosophy, which maintains that as long as products are cheap or free, there’s no monopoly issue.


pages: 113 words: 37,885

Why Wall Street Matters by William D. Cohan

Apple II, asset-backed security, bank run, Bernie Sanders, Blythe Masters, bonus culture, break the buck, buttonwood tree, corporate governance, corporate raider, creative destruction, Credit Default Swap, Donald Trump, Exxon Valdez, financial innovation, financial repression, Fractional reserve banking, Gordon Gekko, greed is good, income inequality, Joseph Schumpeter, London Interbank Offered Rate, margin call, money market fund, moral hazard, Potemkin village, quantitative easing, secular stagnation, Snapchat, South Sea Bubble, Steve Jobs, Steve Wozniak, too big to fail, WikiLeaks

The modern-day equivalent of this sentiment can be found in the musings of Bernie Sanders, the U.S. senator from Vermont and former Democratic presidential candidate, whose stump speeches during the 2016 presidential campaign condemned Wall Street relentlessly. “Greed, fraud, dishonesty and arrogance, these are the words that best describe the reality of Wall Street today,” he said in January 2016. And then he paid homage to one of the most recognizable cultural touchstones about modern Wall Street when he referred to the famous “Greed is good” scene in Wall Street, the 1987 Oliver Stone film, where Gordon Gekko, played with oleaginous glee by Michael Douglas, lectures Bud Fox, his young and aspiring apprentice (played by Charlie Sheen). “So, to those on Wall Street who may be listening today, let me be very clear,” Senator Sanders continued. “Greed is not good. In fact, the greed of Wall Street and corporate America is destroying the fabric of our nation…We will no longer tolerate an economy and a political system that has been rigged by Wall Street to benefit the wealthiest Americans in this country at the expense of everyone else.”


Fortunes of Change: The Rise of the Liberal Rich and the Remaking of America by David Callahan

affirmative action, Albert Einstein, American Legislative Exchange Council, automated trading system, Bernie Sanders, Bonfire of the Vanities, carbon footprint, carried interest, clean water, corporate social responsibility, David Brooks, demographic transition, desegregation, don't be evil, Donald Trump, Douglas Engelbart, Douglas Engelbart, Edward Thorp, financial deregulation, financial independence, global village, Gordon Gekko, greed is good, high net worth, income inequality, Irwin Jacobs: Qualcomm, Jeff Bezos, John Markoff, Kickstarter, knowledge economy, knowledge worker, Marc Andreessen, Mark Zuckerberg, market fundamentalism, medical malpractice, mega-rich, Mitch Kapor, Naomi Klein, NetJets, new economy, offshore financial centre, Peter Thiel, plutocrats, Plutocrats, profit maximization, quantitative trading / quantitative finance, Ralph Nader, Renaissance Technologies, Richard Florida, Robert Bork, rolodex, Ronald Reagan, school vouchers, short selling, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, stem cell, Steve Ballmer, Steve Jobs, unpaid internship, Upton Sinclair, Vanguard fund, War on Poverty, working poor, World Values Survey

Kristol worked to forge an alliance between corporate America and the conservative movement starting in the late 1970s. That alliance mounted a push to roll back taxes and shrink government. Many companies also adopted a more ruthless approach to labor unions, using illegal tactics to thwart organizing efforts. And the compensation of CEOs and other executives began its skyward climb. The next chapter of the story is well known. Corporate values shifted sharply in the 1980s, the “greed is good” era in which vast pay inequities and frequent downsizing became normalized. Conspicuous consumption by corporate chieftains and Wall Street big shots—frowned on in the early postwar decades—returned on a grand and gaudy scale. The new business stars of the moment were brash figures unembarrassed by their mean streaks, such as Donald Trump and Carl Icahn. Milton Friedman’s argument—that profit was the overriding goal of corporate leaders—was taken to its logical extreme in a wave of leveraged buyouts in which entire companies were dismantled and communities devastated for the sake of short-term shareholder gains.

Although Plato envisioned the Guardians as eschewing all material desires and living at a remove from worldly concerns, the modern version of his ideal has looked a little different: first, you make a boatload of money or are born to it, and then—keeping your multiple homes and perhaps your private jet—you turn to doing some good in the world. If oligarchy is government by the rich, for the rich, the contemporary Platonic ideal is about something else: rule by the rich on behalf of the common good, as they define it. This new noblesse oblige is spreading fast, and although it is a big step forward from the “greed is good” ethos, it is still deeply troubling. There are books about American life that describe what is happening, and books that suggest what should happen. This has mainly been the former kind of book. Obviously, however, the trends described so far have weighty implications for those trying to change the direction of public policy and politics. Republican strategists can take away a simple message from my findings: the GOP needs to move to the center if it hopes to again command the loyalties of the upper class.


pages: 412 words: 113,782

Business Lessons From a Radical Industrialist by Ray C. Anderson

addicted to oil, Albert Einstein, banking crisis, business cycle, carbon footprint, centralized clearinghouse, clean water, cleantech, corporate social responsibility, Credit Default Swap, dematerialisation, distributed generation, energy security, Exxon Valdez, fear of failure, Gordon Gekko, greed is good, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), intermodal, invisible hand, late fees, Mahatma Gandhi, market bubble, music of the spheres, Negawatt, new economy, oil shale / tar sands, oil shock, old-boy network, peak oil, renewable energy credits, shareholder value, Silicon Valley, six sigma, supply-chain management, urban renewal, Y2K

I suggest—and I know this is heresy—that Milton Friedman was at the heart, along with a generation of economists and bankers who have blindly followed his mantra: “Business exists to make a profit.” Really? This credo is at the heart of the world view that I’ve already written about—the fundamentally flawed paradigm, the mind-set that underlies the industrial system—and I suggest that that same mind-set also underlies the global financial system. I further suggest that Gordon Gekko’s fictional proclamation in the film Wall Street, “Greed is good,” is as widely accepted as Friedman’s credo, one hand-in-glove with the other, throughout the high-flying financial world. That’s a real double whammy! So, with trillions of dollars seeking instant gratification in short-term profits, with the financial industry coming up with ever-more esoteric and risky ways of satisfying that demand, with a ratings industry turning a blind eye to risk and stamping triple-A on too many pieces of paper (because if one agency didn’t, another would), something had to give, and it did.

See companies Covey, Stephen Craigavon, Northern Ireland, Interface facility creation care credit card debt curbside recycling programs customers attracted by environmental claims listening to cycles, nature’s way dams Dartmouth College debt Deering-Milliken deforestation Déjà vu carpet Dell Dell’Orco, Sergio dematerialization desert brine shrimp Diamond, Jared, Collapse dikes, failure of Dillon-Ridgley, Dianne dioxins Disney Corporation Diversity Connect Dodd, Bobby doing well by doing good dominion over the earth (biblical) Dow Chemicals Drake, Edwin Duke Energy DuPont Earth (planet) as Biblical garden danger faced by Eco Dream Team ecology Ecometrics economic logic economics, courses in Ecosense efficiency and fairness, linked and loss of resilience efficiency measures, useful, but limiting effluent pipes cutting emissions from inventory of inventory of emissions from Ehrlich, Paul and Anne, environmental impact equation of Einstein, Albert Eisenhower, Dwight electric transmission system electric utility industry embodied energy emissions, cutting Emory University end-of-pipe solutions Enel Latin America Energia Global energy clean (including solar) cutting back on use of government subsidies to price of renewable world demands engineering schools, sustainability courses in Enron entrepreneurship go/no-go decision point of training for Entropy carpet line entropy law environment, stewardship of environmental education environmental injustice zones environmentalism false claims suspicion of environmental laws and regulations Environmental Protection Agency environmental responsibility, and profit Epson Portland erosion, and floods ethanol fuels ethical sustainability ethics Evangelical Climate Initiative Evergreen Service Agreement evidence, waiting for last scrap of, before taking precautions externalities extracted minerals, must not increase in nature Exxon Valdez oil spill factories called “plants” (strangely) close to markets fairness, economic and efficiency, are linked Fairworks program faith farmers subsidies to Fastforward to 2020 program Fetz, Charles Fiji Water filtration financial industry, innovative instruments for energy saving financial meltdown of 2008 fish, polluted fishing industry Fitzgerald, Patrick Five P’s floods Fonterra food chain, concentration of contaminants in Ford, Henry forests, value of forever wild Forster, Piers fossil fuels counted as waste in Interface’s metrics dependence on end of age of energy from, not sustainable history of use of Framework Convention on Climate Change (UN) Friedman, Milton Frito-Lay division Fritts, Charles fuel economy mandates future embrace it (or be left behind) showing in the headlights future generations needs of their view of our present handling of the three crises Gallup Gandhi, Mahatma garden, Earth as (in Bible) Genentech General Electric (GE) Georgia Tech Institute for Sustainable Technology and Development (ISTD) Institute of Sustainable Systems (ISS) Germany GlasBac GlasBac RE global climate change doing nothing about, evil of skepticism about globalization, absurd supply chains in Global ReLeaf program global warming. See global climate change global-warming effect, net zero glue God’s currency Goethe Gonen, Ron Google Gore, Al An Inconvenient Truth Gorman, Mary government failure of, to solve environmental problems mandates from power of, to effect environmental change Grant, Ulysses S. Great Dane Trailers “greed is good” Green, John C. greenhouse gas (GHG) emissions effect on global warming effect on other planets (such as Venus) measuring of reduction of volume of green investors Greenlist green power, generation of, on-site green products, can’t be made from brown companies Greenspan, Alan greenwash Gretzky, Wayne grid, “off the” grid parity Grosclose, Frank gross domestic product, distortions of Gustashaw, Dave habitat Habitat for Humanity Haft, David Hansen, James Hart, Gary Hart, Stuart Hartzfeld, Jim Hawken, Paul Blessed Unrest The Ecology of Commerce Hawken, Paul, Amory Lovins, and L.


pages: 374 words: 114,600

The Quants by Scott Patterson

Albert Einstein, asset allocation, automated trading system, beat the dealer, Benoit Mandelbrot, Bernie Madoff, Bernie Sanders, Black Swan, Black-Scholes formula, Blythe Masters, Bonfire of the Vanities, Brownian motion, buttonwood tree, buy and hold, buy low sell high, capital asset pricing model, centralized clearinghouse, Claude Shannon: information theory, cloud computing, collapse of Lehman Brothers, collateralized debt obligation, commoditize, computerized trading, Credit Default Swap, credit default swaps / collateralized debt obligations, diversification, Donald Trump, Doomsday Clock, Edward Thorp, Emanuel Derman, Eugene Fama: efficient market hypothesis, fixed income, Gordon Gekko, greed is good, Haight Ashbury, I will remember that I didn’t make the world, and it doesn’t satisfy my equations, index fund, invention of the telegraph, invisible hand, Isaac Newton, job automation, John Meriwether, John Nash: game theory, Kickstarter, law of one price, Long Term Capital Management, Louis Bachelier, mandelbrot fractal, margin call, merger arbitrage, money market fund, Myron Scholes, NetJets, new economy, offshore financial centre, old-boy network, Paul Lévy, Paul Samuelson, Ponzi scheme, quantitative hedge fund, quantitative trading / quantitative finance, race to the bottom, random walk, Renaissance Technologies, risk-adjusted returns, Robert Mercer, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, Sergey Aleynikov, short selling, South Sea Bubble, speech recognition, statistical arbitrage, The Chicago School, The Great Moderation, The Predators' Ball, too big to fail, transaction costs, value at risk, volatility smile, yield curve, éminence grise

The mood around the country turned decidedly anti–Wall Street as the junk bond scandals hit the front pages of newspapers. An October 1987 Newsweek cover queried, “Is the Party Over? A Jolt for Wall Street’s Whiz Kids.” In December 1987, audiences in movie theaters listened to Gordon Gekko, the slimy takeover artist played by Michael Douglas, proclaim the mantra for the decade in Oliver Stone’s Wall Street: “Greed is good.” A series of popular books reflecting the anti–Wall Street sentiment hit the presses: Bonfire of the Vanities by Tom Wolfe, Barbarians at the Gate by Wall Street Journal reporters Bryan Burrough and John Helyar, The Predators’ Ball by Connie Bruck, Liar’s Poker by Michael Lewis. The quants were licking their wounds. Their wondrous invention, portfolio insurance, was roundly blamed for the meltdown.

At the time, the quants were known as rocket scientists, since many came from research hotbeds such as Bell Labs, where cell phones were invented, or Los Alamos National Laboratory, birthplace of the atomic bomb. Wall Street’s gut traders eventually proved to be no match for such explosive brainpower. Michael Lewis’s Wall Street classic, Liar’s Poker, exemplified and exposed the old-school Big Swinging Dick trader of the 1980s, the age of Gordon Gekko’s “greed is good.” Lewis Ranieri, the mortgage-bond trader made famous in the book, made huge bets based on his burger-fueled gut. Michael Milken of Drexel Burhman for a time ruled the Street, financing ballsy leveraged buyouts with billions in junk bonds. Nothing could be more different from the cerebral, computerized universe of the quants. Those two worlds collided when Aaron Brown strode onto Kidder’s trading floor.


pages: 494 words: 132,975

Keynes Hayek: The Clash That Defined Modern Economics by Nicholas Wapshott

"Robert Solow", airport security, banking crisis, Bretton Woods, British Empire, business cycle, collective bargaining, complexity theory, creative destruction, cuban missile crisis, Francis Fukuyama: the end of history, full employment, Gordon Gekko, greed is good, Gunnar Myrdal, if you build it, they will come, Isaac Newton, Joseph Schumpeter, Kickstarter, liquidationism / Banker’s doctrine / the Treasury view, means of production, Mont Pelerin Society, mortgage debt, New Journalism, Northern Rock, Paul Samuelson, Philip Mirowski, price mechanism, pushing on a string, road to serfdom, Robert Bork, Ronald Reagan, Simon Kuznets, The Chicago School, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Malthus, trickle-down economics, War on Poverty, Yom Kippur War

Adjustments were made and priorities altered. The freewheeling Reagan years had altered the mood in America. Private enterprise replaced communal action as the preferred way to change society. The free-loving flower children of the 1960s’ “Love Generation” had given way to the self-centered “Me Generation” of the ’80s and ’90s. Bob Dylan’s call to action “The Times They Are a-Changin’” had been superceded by Gordon Gekko’s mantra “Greed Is Good.”21 The national battle for civil rights for minorities was replaced by a demand for smaller government, states’ rights, and more individual rights. By the early 1990s, Taylor’s rule, showing the trade-off between interest rates and the rate of inflation, named after the Stanford economist John Taylor,22 came to replace the Phillips curve, the trade-off between employment and inflation, as the equation of choice for those running the economy.

Bush’s Council of Economic Advisers (2005–6). 16 Ben Bernanke, remarks at “A Conference to Honor Milton Friedman,” University of Chicago, Chicago, November 8, 2002. 17 Michael Kinsley (1951– ), American political journalist. 18 Michael Kinsley, “Greenspan Shrugged,” The New York Times, October 14, 2007. 19 Greenspan, Age of Turbulence, p. 68. 20 George H. W. Bush (1924– ), ambassador to the UN, director of the CIA, and 41st president of the United States (1989–93). 21 The “Greed Is Good” speech by Gordon Gekko, the hero of Oliver Stone’s 1987 movie Wall Street, was based on a commencement address at the University of California, 1986, by the convicted inside-dealing stock trader Ivan Boesky, who said, “I think greed is healthy. You can be greedy and still feel good about yourself.” 22 John Brian Taylor (1946– ), American economist and Robert Raymond Professor of Economics at Stanford University. 23 George H.


pages: 436 words: 76

Culture and Prosperity: The Truth About Markets - Why Some Nations Are Rich but Most Remain Poor by John Kay

"Robert Solow", Albert Einstein, Asian financial crisis, Barry Marshall: ulcers, Berlin Wall, Big bang: deregulation of the City of London, business cycle, California gold rush, complexity theory, computer age, constrained optimization, corporate governance, corporate social responsibility, correlation does not imply causation, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, Donald Trump, double entry bookkeeping, double helix, Edward Lloyd's coffeehouse, equity premium, Ernest Rutherford, European colonialism, experimental economics, Exxon Valdez, failed state, financial innovation, Francis Fukuyama: the end of history, George Akerlof, George Gilder, greed is good, Gunnar Myrdal, haute couture, illegal immigration, income inequality, industrial cluster, information asymmetry, intangible asset, invention of the telephone, invention of the wheel, invisible hand, John Meriwether, John Nash: game theory, John von Neumann, Kenneth Arrow, Kevin Kelly, knowledge economy, light touch regulation, Long Term Capital Management, loss aversion, Mahatma Gandhi, market bubble, market clearing, market fundamentalism, means of production, Menlo Park, Mikhail Gorbachev, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, Naomi Klein, Nash equilibrium, new economy, oil shale / tar sands, oil shock, Pareto efficiency, Paul Samuelson, pets.com, popular electronics, price discrimination, price mechanism, prisoner's dilemma, profit maximization, purchasing power parity, QWERTY keyboard, Ralph Nader, RAND corporation, random walk, rent-seeking, Right to Buy, risk tolerance, road to serfdom, Ronald Coase, Ronald Reagan, second-price auction, shareholder value, Silicon Valley, Simon Kuznets, South Sea Bubble, Steve Jobs, telemarketer, The Chicago School, The Market for Lemons, The Nature of the Firm, the new new thing, The Predators' Ball, The Wealth of Nations by Adam Smith, Thorstein Veblen, total factor productivity, transaction costs, tulip mania, urban decay, Vilfredo Pareto, Washington Consensus, women in the workforce, yield curve, yield management

John Gutfreund, chairman of Salomon Brothers, one of the most aggressive investment banks of the 1980s, said successful traders must wake up each morning "ready to bite the ass off a bear." 8 Lester Thurow, economist and former dean of MIT's Sloan School of Management, offers intellectual support for this materialist perspective "Wealth has always been important in the personal pecking order, but it has become, increasingly, the only dimension by which personal worth is measured. It is the only game to play if you want to prove your mettle. It is the big leagues. If you do not play there, by definition you are second rate." 9 In the most extreme versions of the American business model, it is a mistake to deplore materialism and regard selfishness as a vice. Greed is good: nice guys finish last. The rambling but strident philosophy of Ayn Rand, Alan Greenspan's former mentor, proclaims the virtues of selfishness under the title objectivism. 10 The logical conclusion of extreme individualism is that concern for others is an emotion that can properly be called on only to the extent that we feel it spontaneously. Private charity is the only proper mechanism of redistribution, and any further claim by the community would infringe on our autonomy.

But it is also adaptive for us to follow the rules of dysfunctional cultures whose outcomes do not benefit us or the organizations themselves. Adaptive behavior is determined by social and business values we impose on each other-the phenomenon of contagious reputation (chapter 19) is a good example-and the prevailing values of a market economy are key to its success. This is an important part of the explanation of why Norway and Switzerland are rich states and Kenya and Indonesia are not. The maxim that greed is good has set back the cause of economic development in the East, undermined the legitimacy and performance of the market economies of the West. There is no substantive difference between the pyramid schemes that crippled the Albanian economy in the mid-1990s and the stock market bubble of 1999-2000. We shall only gradually learn how much the competitive advantages of businesses in rich states have been eroded in the pursuit of unsustainable reported growth in earnings: banks that have lost the loyalty of their employees; pharmaceutical companies whose pipelines are increasingly empty; media companies that have alienated their creative talent; insurance companies that no longer have the confidence of their customers.


pages: 431 words: 129,071

Selfie: How We Became So Self-Obsessed and What It's Doing to Us by Will Storr

Albert Einstein, autonomous vehicles, banking crisis, bitcoin, computer age, correlation does not imply causation, Donald Trump, Douglas Engelbart, Douglas Engelbart, Elon Musk, en.wikipedia.org, gig economy, greed is good, invisible hand, job automation, John Markoff, Kickstarter, longitudinal study, Lyft, Menlo Park, meta analysis, meta-analysis, Mont Pelerin Society, mortgage debt, Mother of all demos, Nixon shock, Peter Thiel, QWERTY keyboard, rising living standards, road to serfdom, Robert Gordon, Ronald Reagan, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, Silicon Valley startup, Steve Jobs, Steven Levy, Stewart Brand, The Future of Employment, The Rise and Fall of American Growth, Tim Cook: Apple, Travis Kalanick, twin studies, Uber and Lyft, uber lyft, War on Poverty, Whole Earth Catalog

But the ultimate goal of this neoliberal project was about much more than ending the economic chaos of the 1970s. It was the creation of a new form of human. ‘Economics are the method,’ said Thatcher, ‘but the object is to change the soul.’ And about that she was right. The most reliable way to change masses of selves, of course, is by changing the ways by which they have to get along and get ahead. The gamification of society triggered the ‘Greed is Good’ era, which represented a staggering transformation from the self of the anti-materialistic, communalistic hippies that had grown out of the mid-century’s more collective economy. This new and intensified form of competitive individualism meant less support from employers and the state, which, in turn, meant more and more pressure placed upon the individual. To get along and get ahead, in this neoliberal world, meant being fitter, smarter and faster than your neighbours.

That book relates to . . . everything.’ And the new president endorsed like-minded friends, nominating a secretary of state, a secretary of labor and a director of the CIA who were all avowed fans of Rand and her ideas. Trump was, in many ways, a definitive creature of the neoliberal, self-esteem, celebrity era. A sumptuously narcissistic self-publicist, he’d initially become famous during the ‘Greed is Good’ 1980s only for his fame to become supercharged when he starred in the immaculately neoliberal reality show The Apprentice, which turned business into a ferociously competitive game in which losers suffered the public humiliation of a boardroom beat-up and his catchphrase, ‘You’re fired!’ But while his television profile was an important component of his rise to the heights of power, any true understanding of it would be incomplete without an account of one of his most effective tools: the echo chamber and sounding board of social media.


pages: 511 words: 132,682

Competition Overdose: How Free Market Mythology Transformed Us From Citizen Kings to Market Servants by Maurice E. Stucke, Ariel Ezrachi

affirmative action, Airbnb, Albert Einstein, Andrei Shleifer, Bernie Sanders, Boeing 737 MAX, Cass Sunstein, choice architecture, cloud computing, commoditize, corporate governance, Corrections Corporation of America, Credit Default Swap, crony capitalism, delayed gratification, Donald Trump, en.wikipedia.org, George Akerlof, gig economy, Goldman Sachs: Vampire Squid, Google Chrome, greed is good, hedonic treadmill, income inequality, income per capita, information asymmetry, invisible hand, job satisfaction, labor-force participation, late fees, loss aversion, low skilled workers, Lyft, mandatory minimum, Mark Zuckerberg, market fundamentalism, mass incarceration, Menlo Park, meta analysis, meta-analysis, Milgram experiment, mortgage debt, Network effects, out of africa, payday loans, Ponzi scheme, precariat, price anchoring, price discrimination, profit maximization, profit motive, race to the bottom, Richard Thaler, ride hailing / ride sharing, Robert Bork, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, Shoshana Zuboff, Silicon Valley, Snapchat, Social Responsibility of Business Is to Increase Its Profits, Stanford prison experiment, Stephen Hawking, The Chicago School, The Market for Lemons, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, Thomas Davenport, Thorstein Veblen, Tim Cook: Apple, too big to fail, transaction costs, Uber and Lyft, uber lyft, ultimatum game, Vanguard fund, winner-take-all economy

The competition ideologues have made it seem as though we must choose between competition and communism, or, as the choice is ever more frequently being described today, between competition and socialism. But the concept of competition they’ve been peddling for the past forty years—one drained of any ethical or moral content—isn’t the only or even the best form of competition for purposes of creating a healthy, prosperous, and just society. Indeed, as we’ll see, it is often the worst. Greed Is Good. Greed Is Right. Greed Works. President Ronald Reagan told the nation in his first inaugural address, “government is not the solution to our problem; government is the problem.” Competition and markets were his answer, and the concept of competition he was espousing was the narrow one espoused by Milton Friedman and his cohorts at the University of Chicago. In touting the power of markets to self-correct, the Chicago School theorists characterized economic competition as relentless zero-sum warfare, where some must lose in order for others to win.

Is selfishness the essential foundation for economic activity in a capitalistic society? Will countries with greedier citizens deliver greater prosperity? And should we, as a society, elevate greed and use it to define ourselves? In answer to all of the above: Absolutely not. Competition, Collaboration, and Fairness Can Coexist While many people, not just the Chicago School jurists, quote Adam Smith to justify their belief that “greed is good,” far fewer consider the Scottish economist’s other important book, The Theory of Moral Sentiments. In this book, Smith praised the virtue of prudence—“The care of the health, the fortune, and the rank and reputation of the individual”—but only when it “is combined with many greater and more splendid virtues—valour, extensive and strong benevolence, a sacred regard for the rules of justice.”


pages: 237 words: 50,758

Obliquity: Why Our Goals Are Best Achieved Indirectly by John Kay

Andrew Wiles, Asian financial crisis, Berlin Wall, bonus culture, British Empire, business process, Cass Sunstein, computer age, corporate raider, credit crunch, Daniel Kahneman / Amos Tversky, discounted cash flows, discovery of penicillin, diversification, Donald Trump, Fall of the Berlin Wall, financial innovation, Gordon Gekko, greed is good, invention of the telephone, invisible hand, Jane Jacobs, lateral thinking, Long Term Capital Management, Louis Pasteur, market fundamentalism, Myron Scholes, Nash equilibrium, pattern recognition, Paul Samuelson, purchasing power parity, RAND corporation, regulatory arbitrage, shareholder value, Simon Singh, Steve Jobs, Thales of Miletus, The Death and Life of Great American Cities, The Predators' Ball, The Wealth of Nations by Adam Smith, ultimatum game, urban planning, value at risk

In the end he was forced out of his post at Sunbeam, the appliance manufacturer, amid allegations of accounting abuse and profit manipulation. The corporation went bankrupt. Dunlap was spared possible civil and criminal suits only after he agreed to pay penalties and restitution of fifteen million dollars.10 The history of the last two decades is littered with fallen idols who, like Dunlap, stridently asserted the primacy of wealth. Gordon Gekko, the antihero of Oliver Stone’s 1987 film Wall Street, famously proclaimed: “Greed is good.” Gekko was partly based on Ivan Boesky, a notorious corporate raider of the 1980s, who was reported as telling a class at Columbia: “I want you to know that I think greed is healthy. You can be greedy and still feel good about yourself.”11 Soon after, Boesky went to prison, convicted of insider trading. The businesses that epitomized the explosion of greed on Wall Street in the 1980s were Salomon Brothers (the firm mercilessly caricatured in Michael Lewis’s Liar’s Poker)12 and Drexel Burnham Lambert (more gently pilloried in Connie Bruck’s The Predators’ Ball).13 Salomon turned bond trading from a backwater into the activity of choice for the financially ambitious, while Drexel Burnham Lambert pioneered the issue of junk bonds.


Working the Street: What You Need to Know About Life on Wall Street by Erik Banks

accounting loophole / creative accounting, borderless world, business cycle, corporate governance, estate planning, fixed income, greed is good, old-boy network, risk/return, rolodex, telemarketer

If it involves a lot of money, it has to be complicated, right? Have you ever watched the evening business news and seen all of those people in yellow jackets, packed shoulder-to-shoulder on the floor of some exchange, screaming and waving at each other, faces red and purple—looking either absolutely elated or wildly panicked? Do you remember the movie Wall Street—all the money changing hands, the “greed is good” speech, the little companies buying the big ones, the 4 | W o rk i n g t h e S t re e t “inside information” circulating between good guys and bad guys, the eight-panel cutaway shot of the trading floors with high-powered executives earning and losing millions? For many of you, these TV and movie scenes represent Wall Street—and they make it seem so complicated and unintelligible. In reality, Wall Street isn’t very complicated at all.


pages: 164 words: 57,068

The Second Curve: Thoughts on Reinventing Society by Charles Handy

"Robert Solow", Airbnb, basic income, Bernie Madoff, bitcoin, bonus culture, British Empire, call centre, Clayton Christensen, corporate governance, delayed gratification, Diane Coyle, disruptive innovation, Edward Snowden, falling living standards, future of work, G4S, greed is good, informal economy, Internet of things, invisible hand, joint-stock company, joint-stock limited liability company, Kickstarter, Kodak vs Instagram, late capitalism, mass immigration, megacity, mittelstand, Occupy movement, payday loans, peer-to-peer lending, plutocrats, Plutocrats, Ponzi scheme, Ronald Coase, shareholder value, sharing economy, Skype, Social Responsibility of Business Is to Increase Its Profits, Stanford marshmallow experiment, Steve Jobs, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transaction costs, Veblen good, Walter Mischel

To me it suddenly seemed that the whole idea of taking the maths as the basis of pricing that system [had] failed.’ No, Greenspan was not naive. Along with most of the business world and government, he believed that markets self-corrected. We could see it at work in the street markets. We were taught it at business school. It was that clever device by which selfishness became justified, even if the maxim of ‘greed is good’ was going a bit too far. Adam Smith, the godfather of economics, said it, so it had become a hallowed truth, almost the foundation stone of capitalism. So how could it all have gone so wrong? Let us be clear from the start: Adam Smith did not say that the ‘invisible hand’ would allow self-interest to work for the good of all. He only mentioned that metaphor once in his book The Wealth of Nations, and that was to suggest that an invisible hand would incline a merchant to invest at home rather than in foreign lands.


pages: 209 words: 63,649

The Purpose Economy: How Your Desire for Impact, Personal Growth and Community Is Changing the World by Aaron Hurst

Airbnb, Atul Gawande, barriers to entry, big-box store, business process, call centre, carbon footprint, citizen journalism, commoditize, corporate social responsibility, crowdsourcing, disintermediation, Elon Musk, Firefox, glass ceiling, greed is good, housing crisis, informal economy, Jane Jacobs, jimmy wales, Khan Academy, Kickstarter, Lean Startup, longitudinal study, means of production, Mitch Kapor, new economy, pattern recognition, Peter Singer: altruism, Peter Thiel, QR code, Ray Oldenburg, remote working, Ronald Reagan, selection bias, sharing economy, Silicon Valley, Silicon Valley startup, Steve Jobs, TaskRabbit, Tony Hsieh, too big to fail, underbanked, women in the workforce, young professional, Zipcar

As they came of age, the environmental movement was going mainstream; pioneering social entrepreneurs were popularizing the idea of “doing well by doing good,” with forerunners like Paul Hawken of Smith & Hawken, Ben & Jerry’s, and Anita Roddick of the Body Shop popularizing a new ethic of corporate social responsibility. Meanwhile, celebrities like Matt Damon, Angelina Jolie, and George Clooney were popularizing a new ethic of individual engagement, making it cool to be socially engaged. The excesses of Wall Street, the dot-com boom and bust, and the mentality that “greed is good” began to change the scope of the American Dream for many Millennials coming of age. Even as they saw their parents working harder and spending less time at home in order to afford the big house, three cars, and all the accoutrements of success, they were mostly turned off by these status symbols and began to challenge existing paradigms of success. According to a 2013 study by Deloitte, corporate employees (not just Millennials) now believe that the top responsibility of a company is to provide goods and services that positively impact society.


pages: 202 words: 62,901

The People's Republic of Walmart: How the World's Biggest Corporations Are Laying the Foundation for Socialism by Leigh Phillips, Michal Rozworski

Berlin Wall, Bernie Sanders, call centre, carbon footprint, central bank independence, Colonization of Mars, combinatorial explosion, complexity theory, computer age, corporate raider, decarbonisation, discovery of penicillin, Elon Musk, G4S, Georg Cantor, germ theory of disease, Gordon Gekko, greed is good, hiring and firing, index fund, Intergovernmental Panel on Climate Change (IPCC), Internet of things, inventory management, invisible hand, Jeff Bezos, Joseph Schumpeter, linear programming, liquidity trap, mass immigration, Mont Pelerin Society, new economy, Norbert Wiener, oil shock, passive investing, Paul Samuelson, post scarcity, profit maximization, profit motive, purchasing power parity, recommendation engine, Ronald Coase, Ronald Reagan, sharing economy, Silicon Valley, Skype, sovereign wealth fund, strikebreaker, supply-chain management, technoutopianism, The Nature of the Firm, The Wealth of Nations by Adam Smith, theory of mind, transaction costs, Turing machine, union organizing

But the consensus among the business press and dozens of very bitter former executives is that the overriding cause of Sears’s malaise is the disastrous decision by the company’s chairman and CEO, Edward Lampert, to disaggregate the company’s different divisions into competing units: to create an internal market. From a capitalist perspective, the move appears to make sense. As business leaders never tire of telling us, the free market is the fount of all wealth in modern society. Competition between private companies is the primary driver of innovation, productivity and growth. Greed is good, per Gordon Gekko’s oft-quoted imperative from Wall Street. So one can be excused for wondering why it is, if the market is indeed as powerfully efficient and productive as they say, that all companies did not long ago adopt the market as an internal model. Lampert, libertarian and fan of the laissez-faire egotism of Russian American novelist Ayn Rand, had made his way from working in warehouses as a teenager, via a spell with Goldman Sachs, to managing a $15 billion hedge fund by the age of 41.


Big Bucks: The Explosion of the Art Market in the 21st Century by Adam, Georgina(Author)

BRICs, Frank Gehry, greed is good, high net worth, inventory management, Kickstarter, Mark Zuckerberg, new economy, offshore financial centre, plutocrats, Plutocrats, Silicon Valley, too big to fail, upwardly mobile

Dealers did not have the status they have today: Gilbert Edelson, one of the founders of the Art Dealers Association of America (ADAA), recounts that in the early 1960s museums required dealers to use the side entrance when visiting: ‘They were considered a bit shady,’ he says.50 ‘The real taste-makers early on were the museum committees, perhaps even more so than the dealers,’ says Adam Sheffer, director at the New York gallery Cheim & Read.51 The shift from museums being the taste arbiters to dealers setting the agenda happened gradually, and was mirrored by the shift from the dealers’ role of buying and reselling to representing contemporary artists. That has continued to develop, ultimately leading to an identification of the artist with a gallery that has become today’s ‘branding’. One significant element that changed the contemporary art world, and which set the stage for what would happen in the twenty-first century, was 1980s prosperity and Wall Street. This boom period of ‘greed is good’, the catchphrase from the 1987 film Wall Street, washed into the art market as into other sectors. This was a period of outrageous speculation, art funds and highly leveraged buying by the Japanese, particularly between 1987 and 1990. While the focus was still mainly on Impressionist painters such as Van Gogh and Renoir, the heightened interest in art and the huge prices it was achieving also impacted on the contemporary market.


pages: 295 words: 66,824

A Mathematician Plays the Stock Market by John Allen Paulos

Benoit Mandelbrot, Black-Scholes formula, Brownian motion, business climate, business cycle, butter production in bangladesh, butterfly effect, capital asset pricing model, correlation coefficient, correlation does not imply causation, Daniel Kahneman / Amos Tversky, diversified portfolio, dogs of the Dow, Donald Trump, double entry bookkeeping, Elliott wave, endowment effect, Erdős number, Eugene Fama: efficient market hypothesis, four colour theorem, George Gilder, global village, greed is good, index fund, intangible asset, invisible hand, Isaac Newton, John Nash: game theory, Long Term Capital Management, loss aversion, Louis Bachelier, mandelbrot fractal, margin call, mental accounting, Myron Scholes, Nash equilibrium, Network effects, passive investing, Paul Erdős, Paul Samuelson, Ponzi scheme, price anchoring, Ralph Nelson Elliott, random walk, Richard Thaler, Robert Shiller, Robert Shiller, short selling, six sigma, Stephen Hawking, stocks for the long run, survivorship bias, transaction costs, ultimatum game, Vanguard fund, Yogi Berra

If we (or, more likely, our computer) pick these numbers until their sum exceeds 1, the average number of picks we’d need would be e, about 2.718. The ubiquitous e also happens to equal 1 + 1/1! + 1/2! + 1/3! + 1/4! + . . . , the same expression my professor was writing on the board many years ago. (Inspired by a remark by stock speculator Ivan Boesky, Gordon Gecko in the 1987 movie Wall Street stated, “Greed is good.” He misspoke. He intended to say, “e is good.”) Many of the formulas useful in finance are consequences of these two formulas: A = P(1 + r)t for annual compounding and, for continuous compounding, A = Pert. To illustrate how they’re used, note that if you deposit $5,000 and it’s compounded annually for 12 years at 8 percent, it will be worth $5,000(1.08)12 or $12,590.85. If this same $5,000 is compounded continuously, it will be worth $5,000e(.08 × 12) or $13,058.48.


pages: 235 words: 65,885

Peak Everything: Waking Up to the Century of Declines by Richard Heinberg, James Howard (frw) Kunstler

addicted to oil, anti-communist, Asilomar, back-to-the-land, clean water, Community Supported Agriculture, deindustrialization, delayed gratification, demographic transition, ending welfare as we know it, energy transition, Fractional reserve banking, greed is good, Haber-Bosch Process, happiness index / gross national happiness, income inequality, Intergovernmental Panel on Climate Change (IPCC), land reform, means of production, oil shale / tar sands, peak oil, plutocrats, Plutocrats, reserve currency, ride hailing / ride sharing, Ronald Reagan, the built environment, the scientific method, Thomas Malthus, too big to fail, urban planning

So what did the Boomers do after 1980? Having already taken a detour into the bleary world of recreational drugs, many of the more spirited Boomers now turned to gurus, meditation, and cults: politics was a bummer; if we really wanted to change the world we should change our heads first. Other Boomers steered toward the stock market and scrambled up the corporate ladder. They got jobs, made money, and discovered that “greed is good.” By the end of the decade it was apparent that the Boomers were divided, with some upholding the Earth Day vision, others honing their skills as right-wing radio talk show hosts, and the rest just trying to get by. Another Fork in the Road Bill Clinton, the first Boomer president (born in 1946), elicited high hopes among his generational peers feeling battered by a dozen years of Reagan/Bush.


pages: 272 words: 64,626

Eat People: And Other Unapologetic Rules for Game-Changing Entrepreneurs by Andy Kessler

23andMe, Andy Kessler, bank run, barriers to entry, Berlin Wall, Bob Noyce, British Empire, business cycle, business process, California gold rush, carbon footprint, Cass Sunstein, cloud computing, collateralized debt obligation, collective bargaining, commoditize, computer age, creative destruction, disintermediation, Douglas Engelbart, Eugene Fama: efficient market hypothesis, fiat currency, Firefox, Fractional reserve banking, George Gilder, Gordon Gekko, greed is good, income inequality, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, Joseph Schumpeter, Kickstarter, knowledge economy, knowledge worker, libertarian paternalism, low skilled workers, Mark Zuckerberg, McMansion, Netflix Prize, packet switching, personalized medicine, pets.com, prediction markets, pre–internet, profit motive, race to the bottom, Richard Thaler, risk tolerance, risk-adjusted returns, Silicon Valley, six sigma, Skype, social graph, Steve Jobs, The Wealth of Nations by Adam Smith, transcontinental railway, transfer pricing, wealth creators, Yogi Berra

Markets value those profits and set the price for the enterprise so they can raise more money to grow. The stock market allocates precious capital to companies it thinks can maximize profits and starves those that can’t. In other words, the stock market is democracy’s half-evil henchman, whose tool is the size of the carrot, not the use of the stick. The tenets of capitalism’s great economists, from Adam Smith’s Invisible Hand to Joseph Schumpeter’s Creative Destruction and Gordon Gekko’s Greed Is Good, are all powerful concepts, but it’s profits and the stock market that carry out the dirty work. No Five-Year Plans. All men are created equal, but a few of you need to be canned and retrained so progress can happen again. New industries get funded and start hiring again. But which ones? The ones with the best prospects for profits. Remember, markets don’t create wealth. They allow for price discovery and for productivity to be priced into the value of companies.


pages: 259 words: 67,261

Rethinking Narcissism: The Bad---And Surprising Good---About Feeling Special by Dr. Craig Malkin

Bernie Madoff, greed is good, helicopter parent, longitudinal study, meta analysis, meta-analysis, Ronald Reagan, theory of mind

Four centuries after Aristotle, Christian teachings added a negative fillip: making too much of oneself constitutes the sin of pride (and a quick path to hell). Excesses of the self underlie other sins—sloth, greed, gluttony, and envy—as well. Down through the centuries, the debate raged, engaging philosophers from Thomas Hobbes (self-love is part of brutish human nature) to Adam Smith (self-interest benefits society, aka “greed is good”). It wasn’t until the end of the 19th century, however, that the debate entered into the circles of medicine and psychology and the word narcissism first appeared. In 1898 pioneering British sexologist Havelock Ellis described patients who’d literally fallen in love with themselves, sprinkling their bodies with kisses from their own lips and masturbating to excess, as suffering from a “Narcissus-like” ailment.


pages: 254 words: 68,133

The Age of Illusions: How America Squandered Its Cold War Victory by Andrew J. Bacevich

affirmative action, Affordable Care Act / Obamacare, anti-communist, Berlin Wall, Bernie Sanders, clean water, Columbian Exchange, Credit Default Swap, cuban missile crisis, David Brooks, deindustrialization, Donald Trump, Fall of the Berlin Wall, Francis Fukuyama: the end of history, friendly fire, gig economy, global village, Gordon Gekko, greed is good, illegal immigration, income inequality, Jeff Bezos, Kickstarter, Marshall McLuhan, mass incarceration, Mikhail Gorbachev, Monroe Doctrine, Norman Mailer, obamacare, Occupy movement, planetary scale, plutocrats, Plutocrats, Potemkin village, price stability, Project for a New American Century, Ronald Reagan, Ronald Reagan: Tear down this wall, Saturday Night Live, school choice, Silicon Valley, Thomas L Friedman, too big to fail, trickle-down economics, WikiLeaks

Inverting the title of William Wyler’s Oscar-winning film of 1946, the journalist Barbara Ehrenreich surveyed the period and called it The Worst Years of Our Lives.5 If Wyler’s Best Years had seemed to capture the essence of the immediate postwar period, its 1980s counterpart was Oliver Stone’s Wall Street, released in 1987. Stone’s film centered on a cutthroat business executive, Gordon Gekko, who operated on the principle that “greed is good.” In comparison with Trump’s real-life brashness and extravagance, the celluloid Gekko looked like a piker. Like Gekko, however, Trump embodied values that seemed, at least for a moment, to express something essential about the United States. In October 1989, People magazine took a stab at explaining Trump’s standing in contemporary culture while hinting at its potential political implications.


pages: 247 words: 64,986

Hive Mind: How Your Nation’s IQ Matters So Much More Than Your Own by Garett Jones

centre right, clean water, corporate governance, David Ricardo: comparative advantage, en.wikipedia.org, experimental economics, Flynn Effect, Gordon Gekko, greed is good, hive mind, invisible hand, Kenneth Arrow, law of one price, meta analysis, meta-analysis, prediction markets, Robert Gordon, Ronald Coase, Saturday Night Live, social intelligence, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, Thorstein Veblen, wikimedia commons, zero-sum game

This is one example of the famous “prisoner’s dilemma,” in which individual greed leads to an awful group outcome. Prisoner’s dilemmas are everywhere, and they’re the precise opposite of Adam Smith’s famous “invisible hand,” in which individual greed leads to a positive group outcome. Invisible hands and prisoner’s dilemmas are both at work in the world: sometimes, as Gordon Gekko said in the movie Wall Street, “Greed is good,” and sometimes greed creates misery. In this and the next chapter, we’ll see how greed can create misery, and we’ll see how higher-IQ groups are just a bit more likely to find a way to cooperate, a bit more likely to avoid the prisoner’s dilemma. The Real Prisoner’s Dilemma First off, let’s go back to the source—the classic economic example of when greed is bad. You and your accomplice rob a bank, and a few hours later, you both get picked up by the police and put into separate interrogation rooms.


pages: 239 words: 69,496

The Wisdom of Finance: Discovering Humanity in the World of Risk and Return by Mihir Desai

activist fund / activist shareholder / activist investor, Albert Einstein, Andrei Shleifer, assortative mating, Benoit Mandelbrot, Brownian motion, capital asset pricing model, carried interest, Charles Lindbergh, collective bargaining, corporate governance, corporate raider, discounted cash flows, diversified portfolio, Eugene Fama: efficient market hypothesis, financial innovation, follow your passion, George Akerlof, Gordon Gekko, greed is good, housing crisis, income inequality, information asymmetry, Isaac Newton, Jony Ive, Kenneth Rogoff, longitudinal study, Louis Bachelier, moral hazard, Myron Scholes, new economy, out of africa, Paul Samuelson, Pierre-Simon Laplace, principal–agent problem, Ralph Waldo Emerson, random walk, risk/return, Robert Shiller, Robert Shiller, Ronald Coase, Silicon Valley, Steve Jobs, Thales and the olive presses, Thales of Miletus, The Market for Lemons, The Nature of the Firm, The Wealth of Nations by Adam Smith, Tim Cook: Apple, transaction costs, zero-sum game

A son of Albanian immigrants, he launched a hedge fund, was indicted for securities fraud, ran a pharmaceutical company, raised prices on a lifesaving drug by 5,000 percent, pled the Fifth Amendment when called to testify before Congress, purchased a onetime edition of a Wu-Tang Clan album for millions (and won’t share it), and livestreamed his life, which included flirting with underage girls, all by the age of thirty-three. With real finance characters like this, who needs fiction? Given how pervasive the theme of insatiable desire is in modern-day depictions of finance, it begs the question: Does this theme of insatiable desire reflect an idea grounded in finance? It is tempting to conclude that in fact finance is all about the individual pursuit of more. After all, when Gordon Gekko of Wall Street says “greed is good,” isn’t he actually framing a key insight of economics—that the pursuit of self-interest in some settings can lead to good outcomes? In fact, the most fundamental idea of finance questions the pursuit of more. It is an idea so foundational that it is often not taught and just left unsaid—as I have done so far. As we’ve seen, finance is primarily the story of risk and its omnipresence. Insurance and risk management (options and diversification) are activities we undertake to deal with risk.


pages: 733 words: 179,391

Adaptive Markets: Financial Evolution at the Speed of Thought by Andrew W. Lo

"Robert Solow", Albert Einstein, Alfred Russel Wallace, algorithmic trading, Andrei Shleifer, Arthur Eddington, Asian financial crisis, asset allocation, asset-backed security, backtesting, bank run, barriers to entry, Berlin Wall, Bernie Madoff, bitcoin, Bonfire of the Vanities, bonus culture, break the buck, Brownian motion, business cycle, business process, butterfly effect, buy and hold, capital asset pricing model, Captain Sullenberger Hudson, Carmen Reinhart, collapse of Lehman Brothers, collateralized debt obligation, commoditize, computerized trading, corporate governance, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, Daniel Kahneman / Amos Tversky, delayed gratification, Diane Coyle, diversification, diversified portfolio, double helix, easy for humans, difficult for computers, Ernest Rutherford, Eugene Fama: efficient market hypothesis, experimental economics, experimental subject, Fall of the Berlin Wall, financial deregulation, financial innovation, financial intermediation, fixed income, Flash crash, Fractional reserve banking, framing effect, Gordon Gekko, greed is good, Hans Rosling, Henri Poincaré, high net worth, housing crisis, incomplete markets, index fund, interest rate derivative, invention of the telegraph, Isaac Newton, James Watt: steam engine, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, Joseph Schumpeter, Kenneth Rogoff, London Interbank Offered Rate, Long Term Capital Management, longitudinal study, loss aversion, Louis Pasteur, mandelbrot fractal, margin call, Mark Zuckerberg, market fundamentalism, martingale, merger arbitrage, meta analysis, meta-analysis, Milgram experiment, money market fund, moral hazard, Myron Scholes, Nick Leeson, old-boy network, out of africa, p-value, paper trading, passive investing, Paul Lévy, Paul Samuelson, Ponzi scheme, predatory finance, prediction markets, price discovery process, profit maximization, profit motive, quantitative hedge fund, quantitative trading / quantitative finance, RAND corporation, random walk, randomized controlled trial, Renaissance Technologies, Richard Feynman, Richard Feynman: Challenger O-ring, risk tolerance, Robert Shiller, Robert Shiller, Sam Peltzman, Shai Danziger, short selling, sovereign wealth fund, Stanford marshmallow experiment, Stanford prison experiment, statistical arbitrage, Steven Pinker, stochastic process, stocks for the long run, survivorship bias, Thales and the olive presses, The Great Moderation, the scientific method, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, Thomas Malthus, Thorstein Veblen, Tobin tax, too big to fail, transaction costs, Triangle Shirtwaist Factory, ultimatum game, Upton Sinclair, US Airways Flight 1549, Walter Mischel, Watson beat the top human players on Jeopardy!, WikiLeaks, Yogi Berra, zero-sum game

In each case, dopamine is released into the nucleus accumbens, reinforcing the behavior. With sufficient repetition, the action associated with the dopamine release becomes habit. In the case of cocaine, we call it an addiction. In the case of monetary gain, we call it capitalism. Our most fundamental reaction to monetary gain is hardwired into human physiology. Apparently, we know it instinctively: greed is good. 90 • Chapter 3 To explore this notion of greed further, let’s return to Tversky and Kahneman’s prospect theory from chapter 2. The two psychologists discovered that not only are we fearful, risk-averse creatures when it comes to gains, but we are also greedy, risk-seeking creatures when it comes to losses. We’ve seen how the amygdala and the fear response are involved in risk aversion. However, as we learned, our reaction to gains isn’t a simple mirror image of our reaction to losses.

FINANCE AND THE GORDON GEKKO EFFECT Part of the challenge in thinking about fairness in finance is culture. We don’t usually ask whether a market transaction is fair or not—as long as two mutually consenting adults agree to an exchange, that seems fair enough. But the culture of Homo economicus can sometimes be taken to the extreme, as reflected by one of the most famous lines in movie history: “Greed is good.” In fact, this is a slight adaptation of Michael Douglas’s actual line in the 1987 movie Wall Street, in which Douglas plays the sleazy yet charismatic fi nancier Gordon Gekko. “The point is, ladies and gentleman, that greed, for lack of a better word, is good.” Douglas’s performance is riveting and one might wish that typical corporate meetings were as dramatic. Millions of people saw Wall Street.


pages: 300 words: 78,475

Third World America: How Our Politicians Are Abandoning the Middle Class and Betraying the American Dream by Arianna Huffington

American Society of Civil Engineers: Report Card, Bernie Madoff, Bernie Sanders, call centre, carried interest, citizen journalism, clean water, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, David Brooks, extreme commuting, Exxon Valdez, full employment, greed is good, housing crisis, immigration reform, invisible hand, knowledge economy, laissez-faire capitalism, late fees, market bubble, market fundamentalism, Martin Wolf, medical bankruptcy, microcredit, new economy, New Journalism, offshore financial centre, Ponzi scheme, post-work, Report Card for America’s Infrastructure, Richard Florida, Ronald Reagan, Rosa Parks, single-payer health, smart grid, The Wealth of Nations by Adam Smith, too big to fail, transcontinental railway, trickle-down economics, winner-take-all economy, working poor, Works Progress Administration

Think Bigger, Way Bigger,” 13 May 2010, www.huffingtonpost.com. 54 The names of the Wall Streeters: Matthew Vadum, “Goldman Sachs Government,” 16 Oct. 2008, www.spectator.org. 55 The finance industry has 70 former members of Congress: Public Citizen, “Stop Congress’ Revolving Door of Corruption,” www.citizen.org. 56 This includes 33 chiefs of staff, 54 staffers of the House: Arthur Delaney, “Big Bank Takeover: Report Blames Revolving Door for ‘Too Big to Fail,’ ” 11 May 2010, www.huffingtonpost.com. 57 Five of Senate Banking Committee chair Chris Dodd’s: Kevin Connor, “Big Bank Takeover: How Too-Big-to-Fail’s Army of Lobbyists Has Captured Washington,” Institute for America’s Future, 11 May 2010, www.ourfuture.org. 58 Of course, the revolving door spins both ways: Arthur Delaney, “Big Bank Takeover: Report Blames Revolving Door for ‘Too Big to Fail,’ ” 11 May 2010, www.huffingtonpost.com. 59 On the mining front, former Massey chief operating officer: Brad Johnson, “Don Blankenship’s Record of Profits Over Safety: ‘Coal Pays the Bills,’ ” 8 Apr. 2010, www.thinkprogress.org. 60 At the time of the Upper Big Branch accident he was: Ibid. 61 And President Bush named Massey executive Richard Stickler: Ibid. 62 Stickler had such a lousy safety record: Ibid. 63 That’s what happened when Bush put Edwin Foulke: Stephen Labaton, “OSHA Leaves Worker Safety in Hands of Industry,” 25 Apr. 2007, www.nytimes.com. 64 Earlier in his career, while serving as chairman: Ibid. 65 Then there was Bush’s choice of Mary Sheila Gall: “Mary Sheila Gall Named to Chair CPSC,” 20 Apr. 2001, www.consumeraffairs.com. 66 In her ten years on the commission: Lizette Alvarez, “Consumer Product Safety Chief Sets Deadline to Resign,” 9 Aug. 2001, www.nytimes.com. 67 She even adopted a “Let them eat marbles” stance: Hearing on the nomination of Mary Sheila Gall to chair the Consumer Product Safety Commission before the Committee on Commerce, Science, and Transportation, U.S. Senate, 25 Jul. 2001, www.gpo.gov. 68 And while I’m all for slapping warnings: Matthew Robinson and Daniel Murphy, Greed Is Good: Maximization and Elite Deviance in America (Lanham, MD: Rowman & Littlefield, 2009), 94–95. 69 Thankfully, the Senate refused to confirm Gall: Caroline E. Mayer, “Senate Panel Rejects Bush’s Choice for Consumer Job,” 3 Aug. 2001, www.sfgate.com. 70 Undeterred, Bush filled the slot with Harold Stratton: Daphne Eviatar, “Toy Story,” 3 Jan. 2008, www.thenation.com. 71 Following the money once again: Center for Responsive Politics, “Pharmaceuticals/ Health Products: Long-Term Contribution Trends,” 1990–2010, www.opensecrets.org. 72 In return, the Bush administration served up: Marc Kaufman, “Former FDA Chief Illegally Held Stocks,” 17 Oct. 2006, www.washingtonpost.com. 73 And, if you want to see “overly cozy” run amok: Charlie Savage, “Sex, Drug Use and Graft Cited in Interior Department,” 10 Sep. 2008, www.nytimes.com. 74 We saw how all those former Senate and House staffers: Brian Beutler, “Do Baucus’ Ties to Health Care Industry Compromise His Reform Efforts?”


pages: 322 words: 77,341

I.O.U.: Why Everyone Owes Everyone and No One Can Pay by John Lanchester

asset-backed security, bank run, banking crisis, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Black-Scholes formula, Blythe Masters, Celtic Tiger, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Daniel Kahneman / Amos Tversky, diversified portfolio, double entry bookkeeping, Exxon Valdez, Fall of the Berlin Wall, financial deregulation, financial innovation, fixed income, George Akerlof, greed is good, hedonic treadmill, hindsight bias, housing crisis, Hyman Minsky, intangible asset, interest rate swap, invisible hand, Jane Jacobs, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, Kickstarter, laissez-faire capitalism, light touch regulation, liquidity trap, Long Term Capital Management, loss aversion, Martin Wolf, money market fund, mortgage debt, mortgage tax deduction, mutually assured destruction, Myron Scholes, negative equity, new economy, Nick Leeson, Norman Mailer, Northern Rock, Own Your Own Home, Ponzi scheme, quantitative easing, reserve currency, Right to Buy, risk-adjusted returns, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, South Sea Bubble, statistical model, The Great Moderation, the payments system, too big to fail, tulip mania, value at risk

In fields such as education, equality of opportunity, health care, employees’ rights, the social contract, and culture, the first conversation to happen should be about values and principles; then you have the conversation about costs and what you as a society can afford. In Britain in the last twenty to thirty years that has all been the wrong way round. There was a kind of reverse takeover, in which City values came to dominate the whole of British life. There needs to be a general acceptance that the model has failed: the brakes-off, deregulate or die, privatize or stagnate, lunch is for wimps, greed is good, what’s good for the financial sector is good for the economy model; the “sack the bottom 10 percent,” bonusdriven, “if you can’t measure it, it isn’t real” model; the model which spread from the City to government and from there through the whole culture, in which the idea of value has gradually faded to be replaced by the idea of price. When the credit crunch first began—after the initial waves of panic and the moment when “this sucker could go down”—I thought that there might be a general reevaluation of where we all were.


pages: 306 words: 78,893

After the New Economy: The Binge . . . And the Hangover That Won't Go Away by Doug Henwood

"Robert Solow", accounting loophole / creative accounting, affirmative action, Asian financial crisis, barriers to entry, borderless world, Branko Milanovic, Bretton Woods, business cycle, capital controls, corporate governance, corporate raider, correlation coefficient, credit crunch, deindustrialization, dematerialisation, deskilling, ending welfare as we know it, feminist movement, full employment, gender pay gap, George Gilder, glass ceiling, Gordon Gekko, greed is good, half of the world's population has never made a phone call, income inequality, indoor plumbing, intangible asset, Internet Archive, job satisfaction, joint-stock company, Kevin Kelly, labor-force participation, liquidationism / Banker’s doctrine / the Treasury view, manufacturing employment, means of production, minimum wage unemployment, Naomi Klein, new economy, occupational segregation, pets.com, post-work, profit maximization, purchasing power parity, race to the bottom, Ralph Nader, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, statistical model, structural adjustment programs, Telecommunications Act of 1996, telemarketer, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, total factor productivity, union organizing, War on Poverty, women in the workforce, working poor, zero-sum game

Underperforming companies—those generating insufficient profits to satisfy shareholders—^were taken over, either by allegedly more competent rivals or by corporate raiders (or, as Alan Greenspan dubbed them at the time, "unaffiliated corporate restructurers"), or they were taken private by a management team in partnership with outside investors using lots of borrowed money. Regardless of the financial maneuver, the operational strategy was similar: shut or sell weak divisions, lay off workers, cut wages, break unions (where they existed), speed up the Hne, get the profit rate up. The moral philosophy of this period was nicely summed up by Oliver Stone's Gordon Gekko, channeUng the most famous inside trader of all time, Ivan Boesky: "Greed is good." Unfortunately, these maneuvers usually involved lots of debt, and the debt load proved crippHng by decade's end. So there was a shift of strategy toward shareholder activism. Led by large pension funds, particularly the CaHfornia PubHc Employees Retirement System (Calpers), institutional investors drew up hit lists of saggy companies, and pressed management to shape up or ship out. At the same time, managers' pay was shifted from straight salaries to stock options—the idea was to make managers think not hke pampered employees, but like stockholders, whose income was directly tied to the stock price.The operational strategy was similar to that of the 1980s, however—downsizing, outsourcing, and speedup—whatever was necessary to get profits, and with them, stock prices, up.


pages: 275 words: 77,017

The End of Money: Counterfeiters, Preachers, Techies, Dreamers--And the Coming Cashless Society by David Wolman

addicted to oil, Bay Area Rapid Transit, Berlin Wall, Bernie Madoff, bitcoin, Bretton Woods, carbon footprint, cashless society, central bank independence, collateralized debt obligation, corporate social responsibility, credit crunch, cross-subsidies, Diane Coyle, fiat currency, financial innovation, floating exchange rates, German hyperinflation, greed is good, Isaac Newton, Kickstarter, M-Pesa, Mahatma Gandhi, mental accounting, mobile money, money: store of value / unit of account / medium of exchange, offshore financial centre, P = NP, Peter Thiel, place-making, placebo effect, Ponzi scheme, Ronald Reagan, seigniorage, Silicon Valley, special drawing rights, Steven Levy, the payments system, transaction costs, WikiLeaks

When the doors open onto the top floor, I walk into an empty gray-carpeted suite with windows looking down on the mini city and across the water to bluffs in the distance. In front of one window, four metal chairs are aligned side by side facing out to the Reykjavik harbor. Visiting a place like Iceland and thinking about money is different than doing so in a megalopolis like New York or London. There, everything is money. Not necessarily in the “greed is good” sense, but in the way that a cityscape is entirely manmade. Virtually every square inch of it involves economic activity, and in each office, apartment, restaurant, gallery, and bar, commerce is king. In a place like Reykjavik, though, you can look right past the city onto inhospitable wilderness. Gazing out at the stark volcanic landscapes, the social forces that give money its value come into focus.


pages: 298 words: 81,200

Where Good Ideas Come from: The Natural History of Innovation by Steven Johnson

Ada Lovelace, Albert Einstein, Alfred Russel Wallace, carbon-based life, Cass Sunstein, cleantech, complexity theory, conceptual framework, cosmic microwave background, creative destruction, crowdsourcing, data acquisition, digital Maoism, digital map, discovery of DNA, Dmitri Mendeleev, double entry bookkeeping, double helix, Douglas Engelbart, Douglas Engelbart, Drosophila, Edmond Halley, Edward Lloyd's coffeehouse, Ernest Rutherford, Geoffrey West, Santa Fe Institute, greed is good, Hans Lippershey, Henri Poincaré, hive mind, Howard Rheingold, hypertext link, invention of air conditioning, invention of movable type, invention of the printing press, invention of the telephone, Isaac Newton, Islamic Golden Age, James Hargreaves, James Watt: steam engine, Jane Jacobs, Jaron Lanier, Johannes Kepler, John Snow's cholera map, Joseph Schumpeter, Joseph-Marie Jacquard, Kevin Kelly, lone genius, Louis Daguerre, Louis Pasteur, Mason jar, mass immigration, Mercator projection, On the Revolutions of the Heavenly Spheres, online collectivism, packet switching, PageRank, patent troll, pattern recognition, price mechanism, profit motive, Ray Oldenburg, Richard Florida, Richard Thaler, Ronald Reagan, side project, Silicon Valley, silicon-based life, six sigma, Solar eclipse in 1919, spinning jenny, Steve Jobs, Steve Wozniak, Stewart Brand, The Death and Life of Great American Cities, The Great Good Place, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, transaction costs, urban planning

We do not have a ready-made political vocabulary for the fourth quadrant, particularly the noninstitutional forms of collaboration that have developed around the open-source community. Because these open systems operate outside the conventional incentives of capitalism and resist the usual strictures of intellectual property, the mind reflexively wants to put them on the side of socialism. And yet they are as far from the state-centralized economies that Marx and Engels helped invent as they are from greed-is-good capitalism. They themselves are not the product of market incentives, but they often create environments where private firms thrive, a phenomenon Lawrence Lessig alludes to in his concept of the “hybrid economy,” which blends elements from the open networks of the intellectual commons with the more proprietary walls and tariffs of the private sphere. None of this is meant to imply that the marketplace is the enemy of innovation, or that competition between rival firms doesn’t often lead to useful new products.


Bedsit Disco Queen: How I Grew Up and Tried to Be a Pop Star by Tracey Thorn

Berlin Wall, Bob Geldof, East Village, greed is good, Live Aid, means of production, Mikhail Gorbachev, Neil Kinnock, Ronald Reagan, sexual politics, University of East Anglia, young professional

It’s not possible to say that you watched not a second of the wedding, and that you were dismissive of Live Aid, without sounding like a complete killjoy outsider, but many of us simply lived an entirely different set of experiences, which seem to have gone unrecorded and unwritten about, so that it’s as though they never happened. Scenes which I never witnessed in my life – yuppies chugging champagne in City wine bars, toffs dancing in puffball skirts to Duran Duran – have now become the universal TV shorthand used to locate and define the era. In place of the supposed ambition and Greed is Good ethos, within the world of the alternative band we still adhered somewhat piously to the altruism of the benefit gig. In the mid-1980s we had our own causes, and the benefit gigs were many and various. In 1984 I had sung vocals on a track called ‘Venceremos’ with Simon Booth’s Working Week, in support of Chilean opposition to the Pinochet regime. In January 1985 we appeared at a benefit gig for Nicaragua, and later that same month we played with Orange Juice and Aztec Camera at a benefit for the striking miners.


pages: 252 words: 78,780

Lab Rats: How Silicon Valley Made Work Miserable for the Rest of Us by Dan Lyons

Airbnb, Amazon Web Services, Apple II, augmented reality, autonomous vehicles, basic income, bitcoin, blockchain, business process, call centre, Clayton Christensen, clean water, collective bargaining, corporate governance, corporate social responsibility, creative destruction, cryptocurrency, David Heinemeier Hansson, Donald Trump, Elon Musk, Ethereum, ethereum blockchain, full employment, future of work, gig economy, Gordon Gekko, greed is good, hiring and firing, housing crisis, income inequality, informal economy, Jeff Bezos, job automation, job satisfaction, job-hopping, John Gruber, Joseph Schumpeter, Kevin Kelly, knowledge worker, Lean Startup, loose coupling, Lyft, Marc Andreessen, Mark Zuckerberg, McMansion, Menlo Park, Milgram experiment, minimum viable product, Mitch Kapor, move fast and break things, move fast and break things, new economy, Panopticon Jeremy Bentham, Paul Graham, paypal mafia, Peter Thiel, plutocrats, Plutocrats, precariat, RAND corporation, remote working, RFID, ride hailing / ride sharing, Ronald Reagan, Rubik’s Cube, Ruby on Rails, Sam Altman, Sand Hill Road, self-driving car, shareholder value, Silicon Valley, Silicon Valley startup, six sigma, Skype, Social Responsibility of Business Is to Increase Its Profits, software is eating the world, Stanford prison experiment, stem cell, Steve Jobs, Steve Wozniak, Stewart Brand, TaskRabbit, telemarketer, Tesla Model S, Thomas Davenport, Tony Hsieh, Toyota Production System, traveling salesman, Travis Kalanick, tulip mania, Uber and Lyft, Uber for X, uber lyft, universal basic income, web application, Whole Earth Catalog, Y Combinator, young professional

In the past three chapters I’ve looked at entrepreneurs and investors who are trying to build worker-friendly companies with cultures that are more inclusive and create opportunities for a wider range of people. But how can their ideas spread into the wider world of work? To do that, you need to create a movement. You need to develop a new generation of young people who are not brainwashed with Milton Friedman’s greed-is-good doctrine, and will push back against it, and demand that workers should share in the wealth their labor creates, and stand on equal footing with investors. You need to create a new ideology—a new form of capitalism. In the next chapter, I’ll tell you about people who are doing that, under the banner of what’s called the social enterprise movement. CHAPTER FOURTEEN THE SOCIAL ENTERPRISE MOVEMENT On the morning of September 11, 2001, Dennis Shaughnessy flew from Boston to Baltimore, where he was scheduled to give a presentation at a conference hosted by the Food and Drug Administration.


pages: 272 words: 83,798

A Little History of Economics by Niall Kishtainy

"Robert Solow", Alvin Roth, British Empire, Capital in the Twenty-First Century by Thomas Piketty, car-free, central bank independence, clean water, Corn Laws, creative destruction, credit crunch, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, Eugene Fama: efficient market hypothesis, first-price auction, floating exchange rates, follow your passion, full employment, George Akerlof, greed is good, Hyman Minsky, inflation targeting, invisible hand, John Nash: game theory, John von Neumann, Joseph Schumpeter, Kenneth Arrow, loss aversion, market clearing, market design, means of production, moral hazard, Nash equilibrium, new economy, Occupy movement, Pareto efficiency, Paul Samuelson, prisoner's dilemma, RAND corporation, rent-seeking, Richard Thaler, rising living standards, road to serfdom, Robert Shiller, Robert Shiller, Ronald Reagan, sealed-bid auction, second-price auction, The Chicago School, The Great Moderation, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade route, Vickrey auction, Vilfredo Pareto, washing machines reduced drudgery, wealth creators, Winter of Discontent

Even so, the economy of your country probably has a lot in common with what Smith talked about. Next time you’re in your local shop, look around at the crates of tomatoes, cartons of milk and piles of newspapers. How did they get there? Because the shopkeeper decided to buy them in order to sell them to people like you who want them. No one – not the government, not anyone – told the shopkeeper what to do. It’s tempting to think of Smith’s idea of the invisible hand as ‘greed is good’. This would be a distortion of it, though. Smith saw that commercial society involved a range of good human qualities. Bakers and butchers are often nice to other people. They feel sad when their friends get ill or lose money. That’s how people develop a sense of right and wrong. Commerce wouldn’t work very well if people were totally selfish all the time: bakers would lie about the weight of their loaves and brewers would water down their beer.


The Ages of Globalization by Jeffrey D. Sachs

Admiral Zheng, British Empire, Cape to Cairo, colonial rule, Columbian Exchange, Commentariolus, coronavirus, COVID-19, Covid-19, cuban missile crisis, decarbonisation, demographic transition, Deng Xiaoping, domestication of the camel, Donald Trump, en.wikipedia.org, endogenous growth, European colonialism, global supply chain, greed is good, income per capita, invention of agriculture, invention of gunpowder, invention of movable type, invention of the steam engine, invisible hand, Isaac Newton, James Watt: steam engine, job automation, John von Neumann, joint-stock company, Louis Pasteur, low skilled workers, mass immigration, Nikolai Kondratiev, out of africa, packet switching, Pax Mongolica, precision agriculture, profit maximization, profit motive, purchasing power parity, South China Sea, spinning jenny, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, trade route, transatlantic slave trade, Turing machine, Turing test, urban planning, Watson beat the top human players on Jeopardy!, wikimedia commons

The Spanish monarchy, for instance, eventually outlawed the enslavement of native populations in the Americas in the New Laws of 1542. Yet those demurrals were limited, to say the least. The age of global empire was also an age of monumental cruelty, with ruthless greed built into the emerging capitalist order. By the eighteenth century, a new ideology was taking form, especially in Britain, that “greed is good” (to use a recent summary formulation), because greed spurs a society’s efforts and inventiveness. By giving vent to greed, the logic goes, societies can best harness the insatiable ambitions, great energies and ingenuity of their citizens. While greed by itself might be unappetizing and seem to be antisocial, the unleashing of greed could in fact lead to the common good. Thus was born the idea that Adam Smith would crystalize as the “invisible hand”—the idea that the pursuit of self-interest by each person promotes the common interest of society as a whole as if by an invisible hand.


pages: 324 words: 92,805

The Impulse Society: America in the Age of Instant Gratification by Paul Roberts

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, American Society of Civil Engineers: Report Card, asset allocation, business cycle, business process, Cass Sunstein, centre right, choice architecture, collateralized debt obligation, collective bargaining, computerized trading, corporate governance, corporate raider, corporate social responsibility, creative destruction, crony capitalism, David Brooks, delayed gratification, disruptive innovation, double helix, factory automation, financial deregulation, financial innovation, fixed income, full employment, game design, greed is good, If something cannot go on forever, it will stop - Herbert Stein's Law, impulse control, income inequality, inflation targeting, invisible hand, job automation, John Markoff, Joseph Schumpeter, knowledge worker, late fees, Long Term Capital Management, loss aversion, low skilled workers, mass immigration, new economy, Nicholas Carr, obamacare, Occupy movement, oil shale / tar sands, performance metric, postindustrial economy, profit maximization, Report Card for America’s Infrastructure, reshoring, Richard Thaler, rising living standards, Robert Shiller, Robert Shiller, Rodney Brooks, Ronald Reagan, shareholder value, Silicon Valley, speech recognition, Steve Jobs, technoutopianism, the built environment, The Predators' Ball, the scientific method, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, total factor productivity, Tyler Cowen: Great Stagnation, Walter Mischel, winner-take-all economy

There was Icahn, who, after raiding TWA, directed the struggling airline to borrow half a billion dollars (most of which he paid to himself), then sold off the airline’s most profitable routes (a practice known as asset stripping) to service the debt. There was even a raiders’ gala—a posh annual conference hosted by the deal-making firm Drexel Burnham Lambert for all the big names in restructuring, known as the “Predators’ Ball.” For many critics, and a great many more traumatized former employees, the corporate raider perfectly captured the “greed is good” zeitgeist that overran American corporate culture in the 1980s. But to an emerging school of conservative economists, the raider was nothing less than an economic savior. Raiders had appeared because share prices were falling, and share prices had fallen in part because the companies were being mismanaged. After thirty years of postwar prosperity, many American firms had become complacent and inefficient.


pages: 355 words: 92,571

Capitalism: Money, Morals and Markets by John Plender

activist fund / activist shareholder / activist investor, Andrei Shleifer, asset-backed security, bank run, Berlin Wall, Big bang: deregulation of the City of London, Black Swan, bonus culture, Bretton Woods, business climate, business cycle, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, collapse of Lehman Brothers, collective bargaining, computer age, Corn Laws, corporate governance, creative destruction, credit crunch, Credit Default Swap, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, discovery of the americas, diversification, Eugene Fama: efficient market hypothesis, eurozone crisis, failed state, Fall of the Berlin Wall, fiat currency, financial innovation, financial intermediation, Fractional reserve banking, full employment, God and Mammon, Gordon Gekko, greed is good, Hyman Minsky, income inequality, inflation targeting, information asymmetry, invention of the wheel, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, joint-stock company, Joseph Schumpeter, labour market flexibility, liberal capitalism, light touch regulation, London Interbank Offered Rate, London Whale, Long Term Capital Management, manufacturing employment, Mark Zuckerberg, market bubble, market fundamentalism, mass immigration, means of production, Menlo Park, money market fund, moral hazard, moveable type in China, Myron Scholes, Nick Leeson, Northern Rock, Occupy movement, offshore financial centre, paradox of thrift, Paul Samuelson, plutocrats, Plutocrats, price stability, principal–agent problem, profit motive, quantitative easing, railway mania, regulatory arbitrage, Richard Thaler, rising living standards, risk-adjusted returns, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, shareholder value, short selling, Silicon Valley, South Sea Bubble, spice trade, Steve Jobs, technology bubble, The Chicago School, The Great Moderation, the map is not the territory, The Wealth of Nations by Adam Smith, Thorstein Veblen, time value of money, too big to fail, tulip mania, Upton Sinclair, Veblen good, We are the 99%, Wolfgang Streeck, zero-sum game

It suffered from the flaw that in a society marked by an uneven distribution of income favouring a numerically small elite, the rich had plenty of spending power to satisfy their desires, but not enough buying power to dynamise the economy to its full potential to raise real incomes.8 The German sociologist and economist Werner Sombart nonetheless argued two centuries later that luxury played an important part in the development of capitalism. 9 And Mandeville’s point has trickled down through history. To name just one example, Gordon Gekko’s ‘greed is good’ speech in the film Wall Street clearly descends in a direct line from the author of the fable. The Fable of the Bees was not universally admired by other Enlightenment thinkers. Adam Smith could not bring himself to accept the extremity of Mandeville’s paradox, in which vice was a necessary condition of prosperity. In his justly celebrated redefinition of the boundaries of the argument about business and morality, he emphasised self-interest rather than vice, with his statement in The Wealth of Nations that ‘it is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard for their own interest’. 10 In much the same vein, he added: ‘I have never known much good done by those who affected to trade for the public good.’11 Yet, as the author of The Theory of Moral Sentiments, he also emphasised the need for markets to operate within a moral context and believed that the act of engaging in market exchange entailed a discipline that encouraged good individual behaviour as well as the good of wider society.


pages: 339 words: 99,674

Pay Any Price: Greed, Power, and Endless War by James Risen

air freight, airport security, banking crisis, clean water, drone strike, Edward Snowden, greed is good, illegal immigration, income inequality, large denomination, Occupy movement, pattern recognition, pre–internet, RAND corporation, Silicon Valley, Stanford prison experiment, Stuxnet, too big to fail, WikiLeaks

He usually came up short but that didn’t stop him from playing blackjack on a nightly basis, racking up unwieldy debts that eventually led to his 2010 arrest for bouncing more than $1 million in bad checks at Caesar’s Palace in Las Vegas. Gambling is how he met his first backer, Warren Trepp. Trepp got rich in the biggest casino of them all, Wall Street. He had been Michael Milken’s right-hand man in the heyday of Milken’s famous Beverly Hills trading desk during the “greed is good” era of insider trading in the 1980s. When a hungry federal prosecutor named Rudolph Giuliani went after Milken for insider trading, he tried to get Trepp to roll over on his boss. Trepp refused, even in the face of a threat that he would be charged himself if he failed to cooperate. Milken went to jail, but Giuliani never could nail Trepp. Instead of facing criminal charges, Trepp became the subject of a marathon investigation by the Securities and Exchange Commission (SEC), which tried to impose civil sanctions for Trepp’s alleged part in Milken’s insider-trading bonanza.


pages: 311 words: 94,732

The Rapture of the Nerds by Cory Doctorow, Charles Stross

3D printing, Ayatollah Khomeini, butterfly effect, cognitive dissonance, combinatorial explosion, complexity theory, Credit Default Swap, dematerialisation, Drosophila, epigenetics, Extropian, gravity well, greed is good, haute couture, hive mind, margin call, negative equity, phenotype, plutocrats, Plutocrats, rent-seeking, Richard Feynman, telepresence, Turing machine, Turing test, union organizing

Where a terrestrial establishment would have a central bar area and booths around the periphery, this establishment has a kilometers-wide expanse of glassy floor and a central bar that features such nifty magnification features that stools spring up like self-similar leather mushrooms as you approach any given spot: in the distance, near the walls, gales howl among the hyperspace gates leading to the private areas (which feature planetary themes, so that the subsurface oceanic caverns of Enceladus adjoin the fiery sands of long-dismantled Venus). The dress code is similarly over the top, as Huw realizes when she notices the djinni is wearing an antique Armani suit. She’s no expert on haute couture: she realizes she probably ought to recognize the designer of the cocktail dress the scanner selected for her, but she’s too busy fighting with the insane footwear to care about such minor details. Mid-1980s: Greed is good. It seems a fitting context in which to discuss the identity of a person or persons who might be trying to steal a planet’s worth of computronium. The whole thing is so massively, monstrously over the top—like a nuclear aircraft carrier tricked out as a private yacht—that it takes Huw a moment to realize that she and the djinni are alone. “Where is everyone?” she asks, grabbing his arm for balance.


pages: 345 words: 100,135

Snakes in Suits: When Psychopaths Go to Work by Dr. Paul Babiak, Dr. Robert Hare

business process, computer age, fixed income, greed is good, job satisfaction, laissez-faire capitalism, Norman Mailer, old-boy network, risk tolerance, twin studies

Some who have faltered may have experienced a weakened moral sense of “right” in the face of excessive temptation and easy access to power. Others may feel justified in reaping the rewards in proportion to the size of the organization they lead, arguing that their extravagances seem excessive only to those who have little hope of being so rewarded. Still others have embraced the self-serving mantras that “greed is good” and that success at any cost to others is justifiable and even desirable. But another group exists, one whose behaviors and attitudes are potentially much more destructive to the organization and its employees than those noted above who are motivated by greed or big egos. This group, the subject of this book, displays a personality disorder rooted in lying, manipulation, deceit, egocentricity, callousness, and other potentially destructive traits.


pages: 308 words: 99,298

Brexit, No Exit: Why in the End Britain Won't Leave Europe by Denis MacShane

3D printing, banking crisis, battle of ideas, Big bang: deregulation of the City of London, Boris Johnson, Bretton Woods, British Empire, centre right, Corn Laws, deindustrialization, Doha Development Round, Donald Trump, Etonian, European colonialism, first-past-the-post, fixed income, Gini coefficient, greed is good, illegal immigration, James Dyson, labour mobility, liberal capitalism, low cost airline, low cost carrier, Martin Wolf, mass immigration, Mont Pelerin Society, negative equity, Neil Kinnock, new economy, non-tariff barriers, offshore financial centre, open borders, open economy, price stability, purchasing power parity, quantitative easing, reshoring, road to serfdom, secular stagnation, Silicon Valley, Thales and the olive presses, trade liberalization, transaction costs, women in the workforce

To be sure, these are big ambitions, but if the broad mass of employed people do not believe they want to join a union or entertain the idea of trade unionism as a force to help achieve what Hobbes called ‘commodious living’, then they are more easily seduced by the populist appeals of the far right and hard left against cooperation and sharing power in Europe. More and more of the evangelists of the deregulated, society-destroying, ‘greed-is-good’ and survival-of-the-fittest economic model are now running around telling us there are real problems with unequal distribution, poverty and the revolt of voters who have lost confidence in traditional parties of government. But moving to a new paradigm demands new forms of political and labour movement organisation. Anatole Kaletsky, former Times and Financial Times columnist and author of Capitalism 4.0: The Birth of a New Economy (2010), argues: That is what happened after 2008.


pages: 378 words: 102,966

Affluenza: The All-Consuming Epidemic by John de Graaf, David Wann, Thomas H Naylor, David Horsey

big-box store, Community Supported Agriculture, Corrections Corporation of America, Donald Trump, Exxon Valdez, financial independence, Ford paid five dollars a day, full employment, God and Mammon, greed is good, income inequality, informal economy, invisible hand, Isaac Newton, Mark Shuttleworth, McMansion, medical malpractice, new economy, Peter Calthorpe, Ralph Nader, Ray Oldenburg, Ronald Reagan, Silicon Valley, Simon Kuznets, single-payer health, The Great Good Place, trade route, upwardly mobile, Yogi Berra, young professional

Those Reagan commercials, small towns and smiling people in golden light, seem quaint now, more like the sunset of an old era than the morning of a new one. For one thing, there are no ads to be seen anywhere in the America pictured in those political commercials, no billboards, no product being sold except Reagan. That’s not America anymore. Reagan’s decade may have been that of supply-side economics, but it was also the decade of demand creation. Yuppies were made, not born. “Greed is good,” chirruped Wall Street’s Ivan Boesky. The message of Reagan’s first inaugural ball and Nancy’s $15,000 dress was clear: It’s cool to consume and flaunt it. The tone of ’80s advertising echoed the sentiment: “Treat Yourself. You Deserve a Break Today. You’re Worth It.” Look out for number one. Since 1980, few industries have grown as fast as advertising. Its importance is underscored by a little-known fact: Madison Avenue real estate is the priciest on the planet.


pages: 357 words: 94,852

No Is Not Enough: Resisting Trump’s Shock Politics and Winning the World We Need by Naomi Klein

Airbnb, basic income, battle of ideas, Berlin Wall, Bernie Sanders, Brewster Kahle, Celebration, Florida, clean water, collective bargaining, Corrections Corporation of America, desegregation, Donald Trump, drone strike, Edward Snowden, Elon Musk, energy transition, financial deregulation, greed is good, high net worth, Howard Zinn, illegal immigration, income inequality, Internet Archive, Kickstarter, late capitalism, Mark Zuckerberg, market bubble, market fundamentalism, mass incarceration, Mikhail Gorbachev, moral panic, Naomi Klein, Nate Silver, new economy, Occupy movement, offshore financial centre, oil shale / tar sands, open borders, Peter Thiel, plutocrats, Plutocrats, private military company, profit motive, race to the bottom, Ralph Nader, Ronald Reagan, Saturday Night Live, sexual politics, sharing economy, Silicon Valley, too big to fail, trade liberalization, transatlantic slave trade, Triangle Shirtwaist Factory, trickle-down economics, Upton Sinclair, urban decay, women in the workforce, working poor

But as I’ve reflected on the word during the past months of writing, I started to question its accuracy in this context. A state of shock is produced when a story is ruptured, when we have no idea what’s going on. But in so many ways explored in these pages, Trump is not a rupture at all, but rather the culmination—the logical end point—of a great many dangerous stories our culture has been telling for a very long time. That greed is good. That the market rules. That money is what matters in life. That white men are better than the rest. That the natural world is there for us to pillage. That the vulnerable deserve their fate and the one percent deserve their golden towers. That anything public or commonly held is sinister and not worth protecting. That we are surrounded by danger and should only look after our own. That there is no alternative to any of this.


pages: 391 words: 102,301

Zero-Sum Future: American Power in an Age of Anxiety by Gideon Rachman

Asian financial crisis, bank run, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, Bonfire of the Vanities, borderless world, Bretton Woods, BRICs, capital controls, centre right, clean water, collapse of Lehman Brothers, colonial rule, currency manipulation / currency intervention, deindustrialization, Deng Xiaoping, Doha Development Round, energy security, failed state, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, full employment, global reserve currency, greed is good, Hernando de Soto, illegal immigration, income inequality, invisible hand, Jeff Bezos, laissez-faire capitalism, Live Aid, market fundamentalism, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, moral hazard, mutually assured destruction, Naomi Klein, Nelson Mandela, offshore financial centre, open borders, open economy, Peace of Westphalia, peak oil, pension reform, plutocrats, Plutocrats, popular capitalism, price stability, RAND corporation, reserve currency, rising living standards, road to serfdom, Ronald Reagan, shareholder value, Sinatra Doctrine, sovereign wealth fund, special economic zone, Steve Jobs, Stewart Brand, The Chicago School, The Great Moderation, The Myth of the Rational Market, Thomas Malthus, trickle-down economics, Washington Consensus, Winter of Discontent, zero-sum game

As Robert Wade of the London School of Economics points out, in 1980, before Reagan took office, the richest 1 percent of Americans received around 9 percent of the country’s gross domestic product (GDP). By 2006, the richest 1 percent gobbled up 23 percent of national wealth.16 In the United States and the United Kingdom, the success of the free-market reforms of the 1980s was closely associated with a boom in the financial services industry, which was swiftly reflected in house prices and popular culture. In the States, the boom was captured in the film Wall Street, with its catchphrase “greed is good,” and in Tom Wolfe’s novel The Bonfire of the Vanities. The Dow Jones Industrial Average, which stood at 950 on the day Reagan took office, reached a peak of over 2,700 in August 1987—before the stock-market crash of October of that year.17 Some of Reagan’s critics on the left never accepted that his economic policies had succeeded. They saw them as a cruel sleight of hand, fueled by unsustainable tax cuts and deficit spending and hopelessly tilted towards the wealthy.


pages: 330 words: 99,044

Reimagining Capitalism in a World on Fire by Rebecca Henderson

Airbnb, asset allocation, Berlin Wall, Bernie Sanders, business climate, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, collaborative economy, collective bargaining, commoditize, corporate governance, corporate social responsibility, crony capitalism, dark matter, decarbonisation, disruptive innovation, double entry bookkeeping, Elon Musk, Erik Brynjolfsson, Exxon Valdez, Fall of the Berlin Wall, family office, fixed income, George Akerlof, Gini coefficient, global supply chain, greed is good, Hans Rosling, Howard Zinn, Hyman Minsky, income inequality, index fund, Intergovernmental Panel on Climate Change (IPCC), joint-stock company, Kickstarter, Lyft, Mark Zuckerberg, means of production, meta analysis, meta-analysis, microcredit, mittelstand, Mont Pelerin Society, Nelson Mandela, passive investing, Paul Samuelson, Philip Mirowski, profit maximization, race to the bottom, ride hailing / ride sharing, Ronald Reagan, Rosa Parks, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Snapchat, sovereign wealth fund, Steven Pinker, stocks for the long run, Tim Cook: Apple, total factor productivity, Toyota Production System, uber lyft, urban planning, Washington Consensus, working-age population, Zipcar

Those firms that have a clearly defined purpose beyond profit maximization, where it is clearly understood that the purpose of the firm is not to make shareholders rich, but to build great products in the service of the social good—these are the firms that have the courage and the skills to navigate transformation. Redefining the purpose of the firm is central to reimagining capitalism. What exactly this means and what it might look like in practice is the subject of the next chapter. 4 DEEPLY ROOTED COMMON VALUES Revolutionizing the Purpose of the Firm Some people think greed is good. But over and over it’s proven that ultimately generosity is better. —PAUL POLMAN, RETIRED CEO OF UNILEVER1 On January 12, 2015, in a packed hotel ballroom in Jacksonville, Florida, Mark Bertolini, the CEO of Aetna, announced that beginning in April the firm would be paying a minimum wage of $16/hour.2 Aetna was one of the largest health insurance companies in the world, and his move made headlines.


pages: 339 words: 105,938

The Skeptical Economist: Revealing the Ethics Inside Economics by Jonathan Aldred

airport security, Berlin Wall, carbon footprint, citizen journalism, clean water, cognitive dissonance, congestion charging, correlation does not imply causation, Diane Coyle, endogenous growth, experimental subject, Fall of the Berlin Wall, first-past-the-post, framing effect, greed is good, happiness index / gross national happiness, hedonic treadmill, Intergovernmental Panel on Climate Change (IPCC), invisible hand, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, labour market flexibility, laissez-faire capitalism, libertarian paternalism, longitudinal study, new economy, Pareto efficiency, pension reform, positional goods, Ralph Waldo Emerson, RAND corporation, risk tolerance, school choice, spectrum auction, Thomas Bayes, trade liberalization, ultimatum game

Survey evidence on charitable giving, and laboratory studies of behaviour in games such as the Ultimatum Game, both show economics students becoming more selfish over the duration of their courses.56 If this kind of intensive exposure to the Homo economicus doctrine increases selfishness, there may well be a similar, albeit milder, effect on people with more limited exposure to the doctrine. Does reading The Economist or Freakonomics make you more selfish? Although exposure to the doctrine from just watching television news is much more limited, the effect may be exaggerated because by that stage the doctrine is caricatured, becoming simply ‘Greed is Good’.57 Unfortunately, in the absence of research studying the impact of the doctrine as presented in the mainstream media, these questions cannot be answered directly. But there is evidence on a related issue. Some constitutional frameworks and legal systems both presume and affirm that citizens can be trusted to act responsibly, cooperate and not always put their narrow self-interest above the common good.


pages: 375 words: 105,067

Pound Foolish: Exposing the Dark Side of the Personal Finance Industry by Helaine Olen

American ideology, asset allocation, Bernie Madoff, buy and hold, Cass Sunstein, Credit Default Swap, David Brooks, delayed gratification, diversification, diversified portfolio, Donald Trump, Elliott wave, en.wikipedia.org, estate planning, financial innovation, Flash crash, game design, greed is good, high net worth, impulse control, income inequality, index fund, London Whale, longitudinal study, Mark Zuckerberg, money market fund, mortgage debt, oil shock, payday loans, pension reform, Ponzi scheme, post-work, quantitative easing, Ralph Nader, RAND corporation, random walk, Richard Thaler, Ronald Reagan, Saturday Night Live, Stanford marshmallow experiment, stocks for the long run, too big to fail, transaction costs, Unsafe at Any Speed, upwardly mobile, Vanguard fund, wage slave, women in the workforce, working poor, éminence grise

Send it straight to Wall Street so that they can pay their brokers $10 million a year in bonuses? I mean, how stupid does a person have to be?” he said in a recent Time magazine interview. Knowing what we do about the state of the American retirement system, he has a point, if not the solution. Kiyosaki’s not howling at you for being in debt like Suze Orman, Dave Ramsey, and David Bach are. He’s howling at you for being in the wrong sort of debt. Greed is good, he tells us. “The problem I sense today,” he writes in Rich Dad, Poor Dad, “is that there are millions of people who feel guilty about their greed. It’s an old conditioning from their childhood. Their desire to have the finer things that life offers. Most have been conditioned subconsciously to say, ‘You can’t have that,’ or ‘You’ll never afford that.’” In other words, Kiyosaki, along with other wealth gurus like Allen, Eker, and all the rest, doesn’t think you are a spendthrift.


pages: 452 words: 110,488

The Cheating Culture: Why More Americans Are Doing Wrong to Get Ahead by David Callahan

1960s counterculture, affirmative action, business cycle, corporate governance, corporate raider, creative destruction, David Brooks, deindustrialization, East Village, fixed income, forensic accounting, full employment, game design, greed is good, high batting average, housing crisis, illegal immigration, income inequality, job satisfaction, mandatory minimum, market fundamentalism, McMansion, microcredit, moral hazard, new economy, New Urbanism, offshore financial centre, oil shock, old-boy network, plutocrats, Plutocrats, postindustrial economy, profit maximization, profit motive, RAND corporation, Ray Oldenburg, Robert Bork, rolodex, Ronald Reagan, shareholder value, Shoshana Zuboff, Silicon Valley, Steve Jobs, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, Thorstein Veblen, War on Poverty, winner-take-all economy, World Values Survey, young professional, zero-sum game

Why worry about being censured by your state's medical society for taking kickbacks to prescribe certain drugs when those groups are more interested in protecting the interests of doctors than of the general public? Why worry about being thrown out of baseball for using steroids when neither of the major leagues has mandatory drug testing? Growing temptations to cheat have been all the more seductive given the trumpeted morality of the free market. If competition is good—if even greed is good—than maybe questionable cutthroat behavior is also good. In principle, few Americans embrace the idea that "might makes right." In practice, this idea now flourishes across our society, and much of the new cheating is among those with the highest incomes and social status. The Winning Class's clout inevitably has produced hubris and a sense that the rules governing what Leona Helmsley called "the little people" do not apply to them.


pages: 385 words: 111,807

A Pelican Introduction Economics: A User's Guide by Ha-Joon Chang

Affordable Care Act / Obamacare, Albert Einstein, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, Berlin Wall, bilateral investment treaty, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, collateralized debt obligation, colonial rule, Corn Laws, corporate governance, corporate raider, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, discovery of the americas, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, falling living standards, financial deregulation, financial innovation, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Akerlof, Gini coefficient, global value chain, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Gunnar Myrdal, Haber-Bosch Process, happiness index / gross national happiness, high net worth, income inequality, income per capita, information asymmetry, intangible asset, interchangeable parts, interest rate swap, inventory management, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, laissez-faire capitalism, land reform, liberation theology, manufacturing employment, Mark Zuckerberg, market clearing, market fundamentalism, Martin Wolf, means of production, Mexican peso crisis / tequila crisis, Nelson Mandela, Northern Rock, obamacare, offshore financial centre, oil shock, open borders, Pareto efficiency, Paul Samuelson, post-industrial society, precariat, principal–agent problem, profit maximization, profit motive, purchasing power parity, quantitative easing, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, Scramble for Africa, shareholder value, Silicon Valley, Simon Kuznets, sovereign wealth fund, spinning jenny, structural adjustment programs, The Great Moderation, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Vilfredo Pareto, Washington Consensus, working-age population, World Values Survey

Financial deregulation in the US at this time laid the foundation for the financial system we have today. The rapid increase in hostile takeovers, in which a company is taken over against the will of the existing management, changed the whole corporate culture in the US. Many of those taking over were ‘corporate raiders’ only interested in asset stripping (namely, the sales of valuable assets, regardless of the impact on the long-term viability of the company), immortalized by Gordon ‘Greed-is-good’ Gekko in the 1987 movie Wall Street. To avoid such a fate, firms had to deliver profits faster than before. Otherwise impatient shareholders would sell up, reducing the share prices and thus exposing the firm to greater danger of hostile takeover. The easiest way for companies to deliver quick profit was through downsizing – reducing the workforce and minimizing investments beyond what is necessary for immediate results, even though these actions diminish the prospect of the company in the longer run.


pages: 383 words: 108,266

Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions by Dan Ariely

air freight, Al Roth, Bernie Madoff, Burning Man, butterfly effect, Cass Sunstein, collateralized debt obligation, computer vision, corporate governance, credit crunch, Daniel Kahneman / Amos Tversky, David Brooks, delayed gratification, endowment effect, financial innovation, fudge factor, Gordon Gekko, greed is good, housing crisis, IKEA effect, invisible hand, lake wobegon effect, late fees, loss aversion, market bubble, Murray Gell-Mann, payday loans, placebo effect, price anchoring, Richard Thaler, second-price auction, Silicon Valley, Skype, The Wealth of Nations by Adam Smith, Upton Sinclair

The scary thought is that if we did the experiments with nonmonetary currencies that were not as immediately convertible into money as tokens, or with individuals who cared less about their honesty, or with behavior that was not so publicly observable, we would most likely have found even higher levels of dishonesty. In other words, the level of deception we observed here is probably an underestimation of the level of deception we would find across a variety of circumstances and individuals. Now suppose that you have a company or a division of a company led by a Gordon Gekko character who declares that “greed is good.” And suppose he used nonmonetary means of encouraging dishonesty. Can you see how such a swashbuckler could change the mind-set of people who in principle want to be honest and want to see themselves as honest, but also want to hold on to their jobs and get ahead in the world? It is under just such circumstances that nonmonetary currencies can lead us astray. They let us bypass our conscience and freely explore the benefits of dishonesty.


pages: 300 words: 106,520

The Nanny State Made Me: A Story of Britain and How to Save It by Stuart Maconie

banking crisis, basic income, Bernie Sanders, bitcoin, Boris Johnson, British Empire, cognitive dissonance, collective bargaining, Corn Laws, David Attenborough, Desert Island Discs, don't be evil, Downton Abbey, Elon Musk, Etonian, failed state, Francis Fukuyama: the end of history, full employment, G4S, Gordon Gekko, greed is good, helicopter parent, hiring and firing, housing crisis, job automation, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, North Sea oil, Own Your Own Home, plutocrats, Plutocrats, rent control, Right to Buy, road to serfdom, Silicon Valley, The Chicago School, universal basic income, Winter of Discontent

So delete your Facebook account, turn off your phone, and come with me for some fresh air. CHAPTER 10 I LOOK FORWARD ‘SELLING ENGLAND BY THE POUND’ ‘It is difficult, if not impossible, to combine the citizens’ rights and interests and the private enterprise’s interests, because the private enterprise aims at its natural and justified objective, the biggest possible profit.’ Joseph Chamberlain ‘Greed is good.’ Gordon Gekko The Upper Derwent Valley, Derbyshire. A fine, calm, April evening, the air warm and still, the kiss of breeze very welcome. The journey up here out of Manchester through the city’s weekday rush hour is never something you’d call pleasant; smothered in the damp armpit or bulky backpack of a fellow traveller on a stifling privatised train, or tail to tail in the fuming cars that crawl through the winding bottlenecks of the A57 to Glossop and Sheffield.


pages: 349 words: 114,038

Culture & Empire: Digital Revolution by Pieter Hintjens

4chan, airport security, AltaVista, anti-communist, anti-pattern, barriers to entry, Bill Duvall, bitcoin, blockchain, business climate, business intelligence, business process, Chelsea Manning, clean water, commoditize, congestion charging, Corn Laws, correlation does not imply causation, cryptocurrency, Debian, Edward Snowden, failed state, financial independence, Firefox, full text search, German hyperinflation, global village, GnuPG, Google Chrome, greed is good, Hernando de Soto, hiring and firing, informal economy, intangible asset, invisible hand, James Watt: steam engine, Jeff Rulifson, Julian Assange, Kickstarter, M-Pesa, mass immigration, mass incarceration, mega-rich, MITM: man-in-the-middle, mutually assured destruction, Naomi Klein, national security letter, Nelson Mandela, new economy, New Urbanism, Occupy movement, offshore financial centre, packet switching, patent troll, peak oil, pre–internet, private military company, race to the bottom, rent-seeking, reserve currency, RFC: Request For Comment, Richard Feynman, Richard Stallman, Ross Ulbricht, Satoshi Nakamoto, security theater, selection bias, Skype, slashdot, software patent, spectrum auction, Steve Crocker, Steve Jobs, Steven Pinker, Stuxnet, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, trade route, transaction costs, twin studies, union organizing, wealth creators, web application, WikiLeaks, Y2K, zero day, Zipf's Law

If the proof of the pudding is in the eating, the right-wing economists are chewing on something cold and rubbery. The blind worship of strong private property rights has allowed many abuses. Broadly, it is an excuse for the rich and powerful to steal public assets and then claim they are the "wealth creators." It has been the plank for many a coup, invasion, and even genocide on grounds to stop "socialist" regimes and their "mad" policies. It blessed the "greed is good" mantra that eviscerated business ethics in the last decades. It protects the patent system from scrutiny and gives it space to grow. It is the curtain that hides the malevolence of the Para-state. And it is fundamentally and powerfully wrong. Wealth does not come from creating more private property. Wealth comes from other people. It is true that the concept of property can protect, capture, and carry that wealth.


pages: 479 words: 113,510

Fed Up: An Insider's Take on Why the Federal Reserve Is Bad for America by Danielle Dimartino Booth

Affordable Care Act / Obamacare, asset-backed security, bank run, barriers to entry, Basel III, Bernie Sanders, break the buck, Bretton Woods, business cycle, central bank independence, collateralized debt obligation, corporate raider, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, diversification, Donald Trump, financial deregulation, financial innovation, fixed income, Flash crash, forward guidance, full employment, George Akerlof, greed is good, high net worth, housing crisis, income inequality, index fund, inflation targeting, interest rate swap, invisible hand, John Meriwether, Joseph Schumpeter, liquidity trap, London Whale, Long Term Capital Management, margin call, market bubble, Mexican peso crisis / tequila crisis, money market fund, moral hazard, Myron Scholes, natural language processing, negative equity, new economy, Northern Rock, obamacare, price stability, pushing on a string, quantitative easing, regulatory arbitrage, Robert Shiller, Robert Shiller, Ronald Reagan, selection bias, short selling, side project, Silicon Valley, The Great Moderation, The Wealth of Nations by Adam Smith, too big to fail, trickle-down economics, yield curve

He didn’t, believing that an unfettered free market is the best allocator of resources. A true optimist. I had less of his faith in mankind. In a few short months, I’d learned plenty about how the investment banking world really worked. While in training at DLJ, my class of newly minted MBAs had watched the 1987 movie Wall Street. The corporate raider Gordon Gecko, played by a sleek Michael Douglas, was our role model. We adopted his mantra: “Greed is good.” We believed it, having arrived on Wall Street at the height of the dot-com mania. Yahoo went public, making instant millionaires of those who held its stock. Clients begged to buy into the next big thing. After a few years I was working with hedge funds, mutual funds, and wealthy individuals. DLJ didn’t silo its sales force, so I gained exposure to many different kinds of investors.


pages: 395 words: 118,446

The Theory of the Leisure Class by Thorstein Veblen, Martha Banta

Albert Einstein, Donald Trump, Frederick Winslow Taylor, greed is good, plutocrats, Plutocrats, Ralph Waldo Emerson, the market place, Thorstein Veblen, Upton Sinclair

CONTENTS Introduction Note on the Text Select Bibliography A Chronology of Thorstein Bunde Veblen THE THEORY OF THE LEISURE CLASS Explanatory Notes INTRODUCTION Veblen’s Pivotal Work ‘Everyone’ appears to acknowledge the importance of The Theory of the Leisure Class, for has not Veblen’s 1899 analysis of the socioeconomics of affluent American societies introduced into the vernacular provocative terms such as ‘conspicuous consumption’ still operative in a world that embraces the notion that ‘greed is good’ and celebrates the Donald Trumps and the Paris Hiltons who clutter our ‘pecuniary culture’? The question remains how well Veblen’s study is really ‘known’—both for what it represents within the range of his own long career and in the newly defined disciplines he guided into the modern world that have had a major impact upon our understanding of the relations between business, industry, and social mores.


Little Failure: A Memoir by Gary Shteyngart

Albert Einstein, anti-communist, Anton Chekhov, East Village, glass ceiling, Gordon Gekko, greed is good, New Journalism, Ronald Reagan, Yom Kippur War, young professional

I know I cannot be Gary Gnu any longer, but then what will I be? A serious, hardworking Republican boy bound for Harvard, Yale, or, in the worst scenario, Princeton. That’s me. I’ll be funny only when it’s called for. No more clowning around. I’ll keep my mouth shut. I have just seen Oliver Stone’s Wall Street with my family, and the lessons were clear. Don’t trust outsiders. Don’t get caught. Focus only on wealth creation. Greed is good. I also think I have a trump card: the $280,000 colonial my family has just bought in Little Neck. Packed in my school bag, just in case, I carry an engineer’s report testifying to our new house’s value, including a photograph of the house in the morning sun, its southern exposure swaddled by a row of hyacinths. Every step of the process, from picking out the actual house among a casting call of colonial look-alikes to calculating the mortgage payments, was done with my obsessive participation.


pages: 523 words: 111,615

The Economics of Enough: How to Run the Economy as if the Future Matters by Diane Coyle

"Robert Solow", accounting loophole / creative accounting, affirmative action, bank run, banking crisis, Berlin Wall, bonus culture, Branko Milanovic, BRICs, business cycle, call centre, Cass Sunstein, central bank independence, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation does not imply causation, Credit Default Swap, deindustrialization, demographic transition, Diane Coyle, different worldview, disintermediation, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, Financial Instability Hypothesis, Francis Fukuyama: the end of history, George Akerlof, Gini coefficient, global supply chain, Gordon Gekko, greed is good, happiness index / gross national happiness, hedonic treadmill, Hyman Minsky, If something cannot go on forever, it will stop - Herbert Stein's Law, illegal immigration, income inequality, income per capita, industrial cluster, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jane Jacobs, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, knowledge economy, light touch regulation, low skilled workers, market bubble, market design, market fundamentalism, megacity, Network effects, new economy, night-watchman state, Northern Rock, oil shock, Pareto efficiency, principal–agent problem, profit motive, purchasing power parity, railway mania, rising living standards, Ronald Reagan, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, South Sea Bubble, Steven Pinker, The Design of Experiments, The Fortune at the Bottom of the Pyramid, The Market for Lemons, The Myth of the Rational Market, The Spirit Level, transaction costs, transfer pricing, tulip mania, ultimatum game, University of East Anglia, web application, web of trust, winner-take-all economy, World Values Survey, zero-sum game

Few people, even among the most ardent fans of market solutions, will disagree with the proposition that the financial markets have, from time to time, brought scandalous demonstrations of greed. While most traders earning multimillion bonuses no doubt think of themselves as upstanding citizens, the rest of us find it hard to find many shining examples of virtuous behavior on Wall Street or in the City of London. In the notorious words of cinema villain Gordon Gekko (Michael Douglas in Wall Street), “Greed is good” is the motto of the markets, but not of Main Street. Likewise, the cartoon “rational economic man” is a selfish being, whereas real people make choices motivated by the moral sentiments of Adam Smith and illuminated by modern evolutionary biology. But does the immorality of the financial markets and the all-out free market ideology they embody in fact corrupt the rest of the economy? Does the efficiency of market outcomes come at a price?


pages: 386 words: 122,595

Naked Economics: Undressing the Dismal Science (Fully Revised and Updated) by Charles Wheelan

"Robert Solow", affirmative action, Albert Einstein, Andrei Shleifer, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, business cycle, buy and hold, capital controls, Cass Sunstein, central bank independence, clean water, collapse of Lehman Brothers, congestion charging, creative destruction, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, Daniel Kahneman / Amos Tversky, David Brooks, demographic transition, diversified portfolio, Doha Development Round, Exxon Valdez, financial innovation, fixed income, floating exchange rates, George Akerlof, Gini coefficient, Gordon Gekko, greed is good, happiness index / gross national happiness, Hernando de Soto, income inequality, index fund, interest rate swap, invisible hand, job automation, John Markoff, Joseph Schumpeter, Kenneth Rogoff, libertarian paternalism, low skilled workers, Malacca Straits, market bubble, microcredit, money market fund, money: store of value / unit of account / medium of exchange, Network effects, new economy, open economy, presumed consent, price discrimination, price stability, principal–agent problem, profit maximization, profit motive, purchasing power parity, race to the bottom, RAND corporation, random walk, rent control, Richard Thaler, rising living standards, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, Sam Peltzman, school vouchers, Silicon Valley, Silicon Valley startup, South China Sea, Steve Jobs, The Market for Lemons, the rule of 72, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, transaction costs, transcontinental railway, trickle-down economics, urban sprawl, Washington Consensus, Yogi Berra, young professional, zero-sum game

Assuming a 3 percent commission, your agent can make $8,400 for doing virtually nothing or $9,600 for doing many weeks of work. Which would you choose? On the buy side or the sell side, your agent’s most powerful incentive is to get a deal done, whether it is at a price favorable to you or not. Economics teaches us how to get the incentives right. As Gordon Gekko told us in the movie Wall Street, greed is good, so make sure that you have it working on your side. Yet Mr. Gekko was not entirely correct. Greed can be bad—even for people who are entirely selfish. Indeed, some of the most interesting problems in economics involve situations in which rational individuals acting in their own best interest do things that make themselves worse off. Yet their behavior is entirely logical. The classic example is the prisoner’s dilemma, a somewhat contrived but highly powerful model of human behavior.


pages: 435 words: 120,574

Strangers in Their Own Land: Anger and Mourning on the American Right by Arlie Russell Hochschild

affirmative action, Affordable Care Act / Obamacare, Bernie Sanders, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, clean water, collective bargaining, Deep Water Horizon, desegregation, Donald Trump, ending welfare as we know it, equal pay for equal work, Exxon Valdez, feminist movement, full employment, greed is good, guest worker program, invisible hand, knowledge economy, McMansion, minimum wage unemployment, new economy, obamacare, oil shock, payday loans, Richard Florida, Ronald Reagan, school vouchers, Silicon Valley, sovereign wealth fund, Thorstein Veblen, urban sprawl, working poor, Yogi Berra

Lake Charles produced the airplane fuel that brought me there and the gasoline I was getting around on, and much of this was produced by companies close by. To prepare for my journey, I re-read Ayn Rand’s Atlas Shrugged, a Tea Party bible lauded by the conservative radio pundit Rush Limbaugh and former Fox News television commentator Glenn Beck. Rand describes serving the needy as a “monstrous idea.” Charity, she says, is bad. Greed is good. If Ayn Rand appealed to them, I imagined, they’re probably pretty selfish, tough, cold people, and I prepared for the worst. But I was thankful to discover many warm, open people who were deeply charitable to those around them, including an older, white liberal stranger writing a book. Given its liberal reputation, I worried about telling people I taught at U.C. Berkeley. I secretly hoped my Louisiana acquaintances would respectfully recall its seventy-two Nobel Laureates, its proud academic standing.


pages: 520 words: 129,887

Power Hungry: The Myths of "Green" Energy and the Real Fuels of the Future by Robert Bryce

addicted to oil, Bernie Madoff, carbon footprint, Cesare Marchetti: Marchetti’s constant, cleantech, collateralized debt obligation, corporate raider, correlation does not imply causation, Credit Default Swap, credit default swaps / collateralized debt obligations, decarbonisation, Deng Xiaoping, en.wikipedia.org, energy security, energy transition, flex fuel, greed is good, Hernando de Soto, hydraulic fracturing, hydrogen economy, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, James Watt: steam engine, Menlo Park, new economy, offshore financial centre, oil shale / tar sands, oil shock, peak oil, Ponzi scheme, purchasing power parity, RAND corporation, Ronald Reagan, Silicon Valley, smart grid, Stewart Brand, Thomas L Friedman, uranium enrichment, Whole Earth Catalog, WikiLeaks

The oceans of natural gas in the Barnett Shale, the Haynesville Shale, and other formations would likely never have been developed if that gas had been owned by the federal or state government. Individuals and entrepreneurs persist in developing new drilling and completion technologies because it’s in their interest to do so. The more they produce from the properties on which they lease or own the minerals, the more money they make. When it comes to getting oil and gas out of the ground, private ownership of mineral rights provides proof positive that greed is good. Without greed—the greed that springs from individuals owning the minerals beneath their feet—the vast oil and natural-gas fields in Texas, California, Oklahoma, Louisiana, and other states would likely remain underdeveloped. Increased domestic gas production—as well as more domestic oil production—will mean more royalty payments to average Americans. In 2007, the total mineral interest payments to individual Americans totaled about $21.5 billion.


pages: 311 words: 130,761

Framing Class: Media Representations of Wealth and Poverty in America by Diana Elizabeth Kendall

Bernie Madoff, blue-collar work, Bonfire of the Vanities, call centre, David Brooks, declining real wages, Donald Trump, employer provided health coverage, ending welfare as we know it, fixed income, framing effect, Georg Cantor, Gordon Gekko, greed is good, haute couture, housing crisis, illegal immigration, income inequality, mortgage tax deduction, new economy, payday loans, Ponzi scheme, Ray Oldenburg, Richard Florida, Ronald Reagan, Saturday Night Live, telemarketer, The Great Good Place, Thorstein Veblen, trickle-down economics, union organizing, upwardly mobile, urban planning, working poor

Leach was the master of price-tag framing, showing viewers some of the lavish residences, luxury vehicles, and exotic travel destinations enjoyed by the world’s wealthiest people.93 At the end of each episode, Leach wished his viewers “champagne wishes and caviar dreams.” As that tag line suggests, the lifestyles of the rich and famous shown on Leach’s program were nothing more than “wishes” or “dreams” for the typical viewer. However, the series supported one of the key tenets of the gospel of materialism—namely, “Greed is good,” as stockbroker Gordon Gekko (played by Michael Douglas) declares in the 1980s film Wall Street. During the economic crisis of the 2000s, in Wall Street 2: Money Never Sleeps, Michael Douglas reprises his role as Gordon Gekko, who emerges twenty years later from prison and seeks to rebuild his career and repair his relationship with his daughter. She is engaged to a young, ambitious Wall Street trader with goals much like Gekko himself had when he became involved in chicanery resembling much of what has contributed to many of this country’s financial problems in the twenty-first century.94 Like the original Wall Street and other films such as the 1980s classic Bonfire of the Vanities, Wall Street 2 highlights price-tag framing: everything (and everybody) has a price, and the higher the price, the greater the zeal with which people will pursue wealth and power at any cost. 9781442202238.print.indb 48 2/10/11 10:46 AM Twenty-Four-Karat Gold Frames 49 Not only does price-tag framing tell media audiences how much the rich pay for their possessions, but it also may suggest that ordinary people can live like millionaires, even if on a reduced scale.


pages: 422 words: 131,666

Life Inc.: How the World Became a Corporation and How to Take It Back by Douglas Rushkoff

addicted to oil, affirmative action, Amazon Mechanical Turk, anti-globalists, banks create money, big-box store, Bretton Woods, car-free, Charles Lindbergh, colonial exploitation, Community Supported Agriculture, complexity theory, computer age, corporate governance, credit crunch, currency manipulation / currency intervention, David Ricardo: comparative advantage, death of newspapers, don't be evil, Donald Trump, double entry bookkeeping, easy for humans, difficult for computers, financial innovation, Firefox, full employment, global village, Google Earth, greed is good, Howard Rheingold, income per capita, invention of the printing press, invisible hand, Jane Jacobs, John Nash: game theory, joint-stock company, Kevin Kelly, Kickstarter, laissez-faire capitalism, loss aversion, market bubble, market design, Marshall McLuhan, Milgram experiment, moral hazard, mutually assured destruction, Naomi Klein, negative equity, new economy, New Urbanism, Norbert Wiener, peak oil, peer-to-peer, place-making, placebo effect, Ponzi scheme, price mechanism, price stability, principal–agent problem, private military company, profit maximization, profit motive, race to the bottom, RAND corporation, rent-seeking, RFID, road to serfdom, Ronald Reagan, short selling, Silicon Valley, Simon Kuznets, social software, Steve Jobs, Telecommunications Act of 1996, telemarketer, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, trade route, trickle-down economics, union organizing, urban decay, urban planning, urban renewal, Vannevar Bush, Victor Gruen, white flight, working poor, Works Progress Administration, Y2K, young professional, zero-sum game

CHAPTER FOUR INDIVIDUALLY WRAPPED Public Relations and the Disconnect from One Another The Self Is the Source “We’re trained in our society to give, but to feel uncomfortable taking or receiving. But if you don’t take, you are denying another person from giving.” Three of the women smile and two others half-nod, glazed over. But the younger one in the corner still appears unconvinced by the life coach leading the session. “What’s that really mean, Eileen?” Amy asks. “Greed is good?” “Well, sure,” answers Eileen, a middle-aged and middleweight woman in a chocolate-brown pantsuit. She doesn’t appear to realize that Amy was quoting from the movie Wall Street. “That’s not how they put it, but yes. We have to learn to accept the bounty that life offers. It’s the key to seeing self as source. Remember, you make the world around you with your thoughts. If you aren’t ready to accept, then how can the universe give you anything you want?”


pages: 447 words: 141,811

Sapiens: A Brief History of Humankind by Yuval Noah Harari

Admiral Zheng, agricultural Revolution, Albert Einstein, Alfred Russel Wallace, Atahualpa, British Empire, cognitive dissonance, correlation does not imply causation, credit crunch, David Graeber, Edmond Halley, European colonialism, Francisco Pizarro, glass ceiling, global village, greed is good, income per capita, invention of gunpowder, Isaac Newton, joint-stock company, joint-stock limited liability company, Kickstarter, liberal capitalism, life extension, Mahatma Gandhi, megacity, Mikhail Gorbachev, out of africa, personalized medicine, Ponzi scheme, Silicon Valley, South China Sea, stem cell, Steven Pinker, The Wealth of Nations by Adam Smith, trade route, transatlantic slave trade, urban planning, zero-sum game

This may not strike you as very original, because we all live in a capitalist world that takes Smith’s argument for granted. We hear variations on this theme every day in the news. Yet Smith’s claim that the selfish human urge to increase private profits is the basis for collective wealth is one of the most revolutionary ideas in human history – revolutionary not just from an economic perspective, but even more so from a moral and political perspective. What Smith says is, in fact, that greed is good, and that by becoming richer I benefit everybody, not just myself. Egoism is altruism. Smith taught people to think about the economy as a ‘win-win situation’, in which my profits are also your profits. Not only can we both enjoy a bigger slice of pie at the same time, but the increase in your slice depends upon the increase in my slice. If I am poor, you too will be poor since I cannot buy your products or services.


pages: 462 words: 129,022

People, Power, and Profits: Progressive Capitalism for an Age of Discontent by Joseph E. Stiglitz

"Robert Solow", affirmative action, Affordable Care Act / Obamacare, barriers to entry, basic income, battle of ideas, Berlin Wall, Bernie Madoff, Bernie Sanders, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carried interest, central bank independence, clean water, collective bargaining, corporate governance, corporate social responsibility, creative destruction, Credit Default Swap, crony capitalism, deglobalization, deindustrialization, disintermediation, diversified portfolio, Donald Trump, Edward Snowden, Elon Musk, Erik Brynjolfsson, Fall of the Berlin Wall, financial deregulation, financial innovation, financial intermediation, Firefox, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, George Akerlof, gig economy, global supply chain, greed is good, income inequality, information asymmetry, invisible hand, Isaac Newton, Jean Tirole, Jeff Bezos, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John von Neumann, Joseph Schumpeter, labor-force participation, late fees, low skilled workers, Mark Zuckerberg, market fundamentalism, mass incarceration, meta analysis, meta-analysis, minimum wage unemployment, moral hazard, new economy, New Urbanism, obamacare, patent troll, Paul Samuelson, pension reform, Peter Thiel, postindustrial economy, price discrimination, principal–agent problem, profit maximization, purchasing power parity, race to the bottom, Ralph Nader, rent-seeking, Richard Thaler, Robert Bork, Robert Gordon, Robert Mercer, Robert Shiller, Robert Shiller, Ronald Reagan, secular stagnation, self-driving car, shareholder value, Shoshana Zuboff, Silicon Valley, Simon Kuznets, South China Sea, sovereign wealth fund, speech recognition, Steve Jobs, The Chicago School, The Future of Employment, The Great Moderation, the market place, The Rise and Fall of American Growth, the scientific method, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transaction costs, trickle-down economics, two-sided market, universal basic income, Unsafe at Any Speed, Upton Sinclair, uranium enrichment, War on Poverty, working-age population

Part of the problem is that whatever the rule, individuals find ways of skirting it. Typically, there may be restraints in their dealing directly with the agency from which they came. But they can give advice to their corporate colleagues about what to say to whom—and let their presence be felt in a variety of other ways. This is an arena where what is required above all else is the right norms and ethics. And the greed-is-good ethic of twenty-first-century American capitalism works against creating the right norms. An ex-public official, especially one with further political ambitions, should worry that accepting a large check from Goldman Sachs in exchange for a short speech might look unseemly. And this might be especially so for an ex-secretary of treasury or state or the president. Any official should especially worry about receiving money from a financial institution that benefited from an action the official took while in office.


pages: 515 words: 132,295

Makers and Takers: The Rise of Finance and the Fall of American Business by Rana Foroohar

accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, additive manufacturing, Airbnb, algorithmic trading, Alvin Roth, Asian financial crisis, asset allocation, bank run, Basel III, bonus culture, Bretton Woods, British Empire, business cycle, buy and hold, call centre, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, centralized clearinghouse, clean water, collateralized debt obligation, commoditize, computerized trading, corporate governance, corporate raider, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, crowdsourcing, David Graeber, deskilling, Detroit bankruptcy, diversification, Double Irish / Dutch Sandwich, Emanuel Derman, Eugene Fama: efficient market hypothesis, financial deregulation, financial intermediation, Frederick Winslow Taylor, George Akerlof, gig economy, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, High speed trading, Home mortgage interest deduction, housing crisis, Howard Rheingold, Hyman Minsky, income inequality, index fund, information asymmetry, interest rate derivative, interest rate swap, Internet of things, invisible hand, John Markoff, joint-stock company, joint-stock limited liability company, Kenneth Rogoff, Kickstarter, knowledge economy, labor-force participation, London Whale, Long Term Capital Management, manufacturing employment, market design, Martin Wolf, money market fund, moral hazard, mortgage debt, mortgage tax deduction, new economy, non-tariff barriers, offshore financial centre, oil shock, passive investing, Paul Samuelson, pensions crisis, Ponzi scheme, principal–agent problem, quantitative easing, quantitative trading / quantitative finance, race to the bottom, Ralph Nader, Rana Plaza, RAND corporation, random walk, rent control, Robert Shiller, Robert Shiller, Ronald Reagan, Satyajit Das, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Silicon Valley startup, Snapchat, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, Steve Jobs, technology bubble, The Chicago School, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tobin tax, too big to fail, trickle-down economics, Tyler Cowen: Great Stagnation, Vanguard fund, zero-sum game

One Aspen Institute survey that followed a group of MBA students throughout their schooling found that their values changed, and not for the better, during the course of their time on campus.45 The students began their studies in what the survey called “customer mode,” believing that corporations should be run for the benefit of a large group of stakeholders, from workers to customers to society as a whole. By the end of their second semester, however, students shifted to “business manager mode,” placing more emphasis than before on maximizing shareholder returns and less on producing high-quality goods and services—a change that, the survey said, reflected “the powerful place shareholders occupy in the first-year curriculum.” Business schools teach, quite literally, that greed is good, and that rational self-interest is economically and socially beneficial. But if there is anything that the last few years of economic crisis, recession, and slow painful rebound have taught us, it’s that the conventional economic wisdom doesn’t always work. THE MORALITY OF BUSINESS EDUCATION An increasing number of business educators at top schools are concerned not only that MBA programs are churning out number crunchers without consciences, but that the programs themselves no longer uphold the mission of America’s top universities, which has always been to preserve, create, and transmit knowledge to advance the public good.


pages: 455 words: 138,716

The Divide: American Injustice in the Age of the Wealth Gap by Matt Taibbi

banking crisis, Bernie Madoff, butterfly effect, buy and hold, collapse of Lehman Brothers, collateralized debt obligation, Corrections Corporation of America, Credit Default Swap, credit default swaps / collateralized debt obligations, Edward Snowden, ending welfare as we know it, fixed income, forensic accounting, Gordon Gekko, greed is good, illegal immigration, information retrieval, London Interbank Offered Rate, London Whale, naked short selling, offshore financial centre, Ponzi scheme, profit motive, regulatory arbitrage, short selling, telemarketer, too big to fail, War on Poverty

Wall Street in 2003 was a very different place from the world Ben Graham had written about in his 1934 Security Analysis. A more definitive portrait of modern finance would probably be the movie Wall Street, which had a profound effect on the city’s business culture, although probably not the effect its heavy-handed lefty director Oliver Stone expected. While the rest of America understood Michael Douglas’s iconic Gordon Gekko character as a villain, and saw his famed “greed is good” speech as incisive satire, many aspiring Wall Street traders sincerely thought—and still think—that Gekko was the movie’s hero. In the early 1990s, Wall Street saw a massive influx of young Gekko wannabes who thought waiting any amount of time to get fabulously wealthy was for losers, or at the very least for people who had never read Sun Tzu. Many of these new world-beaters eschewed the old Wall Street career path of being a broker at a major investment bank and climbing the ladder to a partnership.


pages: 483 words: 134,377

The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor by William Easterly

"Robert Solow", air freight, Andrei Shleifer, battle of ideas, Bretton Woods, British Empire, business process, business process outsourcing, Carmen Reinhart, clean water, colonial rule, correlation does not imply causation, creative destruction, Daniel Kahneman / Amos Tversky, Deng Xiaoping, desegregation, discovery of the americas, Edward Glaeser, en.wikipedia.org, European colonialism, Francisco Pizarro, fundamental attribution error, germ theory of disease, greed is good, Gunnar Myrdal, income per capita, invisible hand, James Watt: steam engine, Jane Jacobs, John Snow's cholera map, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, M-Pesa, microcredit, Monroe Doctrine, oil shock, place-making, Ponzi scheme, risk/return, road to serfdom, Silicon Valley, Steve Jobs, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, Thomas L Friedman, urban planning, urban renewal, Washington Consensus, WikiLeaks, World Values Survey, young professional

The suppliers who provide any goods that are profitable in the marketplace do so only to get the profit, but they wind up unintentionally meeting many of our most pressing needs. Our demand to get our most urgent needs met is what makes the goods profitable. Smith’s Invisible Hand was one of the first introductions of the revolutionary concept of “spontaneous order,” which we discussed in Chapter Two as today including biological evolution, the Internet, language, and social norms. The misunderstanding is that Smith believed “greed is good,” which triggers revulsion against his Invisible Hand on the left. Some on the right have the misunderstanding that Smith gives a blanket endorsement to all profits by the existing businessmen. Actually, Smith held many negative views about both the rich and businessmen. In his first classic, The Theory of Moral Sentiments, published in 1759, Smith spoke of the rich as a “few lordly masters,” consumed by “vain and insatiable desires,” not to mention their “natural selfishness and rapacity.”9 As for businessmen, Smith in The Wealth of Nations spoke of “the mean rapacity, the monopolizing spirit, of merchants and manufacturers,” which sounds like something he had personally observed in Glasgow.


pages: 613 words: 151,140

No Such Thing as Society by Andy McSmith

anti-communist, Ayatollah Khomeini, Berlin Wall, Big bang: deregulation of the City of London, Bob Geldof, Boris Johnson, British Empire, Brixton riot, call centre, cuban missile crisis, Etonian, F. W. de Klerk, Farzad Bazoft, feminist movement, fixed income, Francis Fukuyama: the end of history, friendly fire, full employment, glass ceiling, God and Mammon, greed is good, illegal immigration, index card, John Bercow, Kickstarter, liberal capitalism, light touch regulation, Live Aid, loadsamoney, long peace, means of production, Mikhail Gorbachev, mortgage debt, mutually assured destruction, negative equity, Neil Kinnock, Nelson Mandela, North Sea oil, Northern Rock, old-boy network, popular capitalism, Right to Buy, Ronald Reagan, Rubik’s Cube, Sloane Ranger, South Sea Bubble, spread of share-ownership, strikebreaker, The Chicago School, union organizing, upwardly mobile, urban decay, Winter of Discontent, young professional

The pursuit of income equality will turn this country into a totalitarian slum.’13 The audiences for Caryl Churchill’s verse play, Serious Money, which opened at the Royal Court in spring 1987, were notoriously swollen by the City types that the drama satirized, who all loved it. The crooked American financier Ivan Boesky, who told an audience at Berkeley University that ‘greed is healthy’, was seen as the voice of the times in the USA. In 1989, Gordon Brown wrote an assessment of Thatcher’s record, to which he gave the title ‘Where Greed is Good’. Yet, having grown up in reasonable comfort, and having married a rich man when she was young, Mrs Thatcher herself was not greedy; the political historian, Mark Garnett, who is a long way from being a Thatcherite, concluded that ‘a verdict of “greedy” could only be brought in by a jury which was biased against her for other reasons’.14 It would be an exercise in futility to try to measure whether the British were more or less greedy after 1985 than in other periods since the war.


pages: 462 words: 150,129

The Rational Optimist: How Prosperity Evolves by Matt Ridley

"Robert Solow", 23andMe, agricultural Revolution, air freight, back-to-the-land, banking crisis, barriers to entry, Bernie Madoff, British Empire, call centre, carbon footprint, Cesare Marchetti: Marchetti’s constant, charter city, clean water, cloud computing, cognitive dissonance, collateralized debt obligation, colonial exploitation, colonial rule, Corn Laws, creative destruction, credit crunch, David Ricardo: comparative advantage, decarbonisation, dematerialisation, demographic dividend, demographic transition, double entry bookkeeping, Edward Glaeser, en.wikipedia.org, everywhere but in the productivity statistics, falling living standards, feminist movement, financial innovation, Flynn Effect, food miles, Gordon Gekko, greed is good, Hans Rosling, happiness index / gross national happiness, haute cuisine, hedonic treadmill, Hernando de Soto, income inequality, income per capita, Indoor air pollution, informal economy, Intergovernmental Panel on Climate Change (IPCC), invention of agriculture, invisible hand, James Hargreaves, James Watt: steam engine, Jane Jacobs, John Nash: game theory, joint-stock limited liability company, Joseph Schumpeter, Kevin Kelly, Kickstarter, knowledge worker, Kula ring, Mark Zuckerberg, meta analysis, meta-analysis, mutually assured destruction, Naomi Klein, Northern Rock, nuclear winter, oil shale / tar sands, out of africa, packet switching, patent troll, Pax Mongolica, Peter Thiel, phenotype, plutocrats, Plutocrats, Ponzi scheme, Productivity paradox, profit motive, purchasing power parity, race to the bottom, Ray Kurzweil, rent-seeking, rising living standards, Silicon Valley, spice trade, spinning jenny, stem cell, Steve Jobs, Steven Pinker, Stewart Brand, supervolcano, technological singularity, Thales and the olive presses, Thales of Miletus, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transaction costs, ultimatum game, upwardly mobile, urban sprawl, Vernor Vinge, Vilfredo Pareto, wage slave, working poor, working-age population, Y2K, Yogi Berra, zero-sum game

Mercantilism said that exports made you rich and imports made you poor, a fallacy mocked by Adam Smith when he pointed out that Britain selling durable hardware to France in exchange for perishable wine was a missed opportunity to achieve the ‘incredible aug mentation of the pots and pans of the country’. Marxism said that capitalists got rich because workers got poor, another fallacy. In the film Wall Street, the fictional Gordon Gekko not only says that greed is good; he also adds that it’s a zero-sum game where somebody wins and somebody loses. He is not necessarily wrong about some speculative markets in capital and in assets, but he is about markets in goods and services. The notion of synergy, of both sides benefiting, just does not seem to come naturally to people. If sympathy is instinctive, synergy is not. For most people, therefore, the market does not feel like a virtuous place.


pages: 477 words: 144,329

How Money Became Dangerous by Christopher Varelas

activist fund / activist shareholder / activist investor, Airbnb, airport security, barriers to entry, basic income, bitcoin, blockchain, Bonfire of the Vanities, California gold rush, cashless society, corporate raider, crack epidemic, cryptocurrency, discounted cash flows, disintermediation, diversification, diversified portfolio, Donald Trump, dumpster diving, fiat currency, fixed income, friendly fire, full employment, Gordon Gekko, greed is good, interest rate derivative, John Meriwether, Kickstarter, Long Term Capital Management, mandatory minimum, mobile money, mortgage debt, pensions crisis, pets.com, pre–internet, profit motive, risk tolerance, Saturday Night Live, shareholder value, side project, Silicon Valley, Steve Jobs, technology bubble, The Predators' Ball, too big to fail, universal basic income, zero day

Our obsession in the ’80s with the accumulation of wealth swelled in concert with Wall Street’s emergence from the shadows. As a result of that emergence, the financial services industry became an end in itself over the next three decades. For better or worse, it became the star of the show, rather than the hidden operator of the lights and curtain. Steinberg’s attack on Disney in 1984 was one of the first moments in which the greed-is-good Wall Street culture of the ’80s stepped into the public spotlight. Because Disney was a beloved institution, this threat to its existence was major national news, and it provided a swift education for many Americans in this previously unfamiliar world. Wall Street became such a forceful presence in the national consciousness that, only three years later, Oliver Stone didn’t hesitate to infuse his film with terms like “golden parachutes” and lines like “There is no nobility in poverty.”


pages: 524 words: 155,947

More: The 10,000-Year Rise of the World Economy by Philip Coggan

"Robert Solow", accounting loophole / creative accounting, Ada Lovelace, agricultural Revolution, Airbnb, airline deregulation, Andrei Shleifer, anti-communist, assortative mating, autonomous vehicles, bank run, banking crisis, banks create money, basic income, Berlin Wall, Bob Noyce, Branko Milanovic, Bretton Woods, British Empire, business cycle, call centre, capital controls, carbon footprint, Carmen Reinhart, Celtic Tiger, central bank independence, Charles Lindbergh, clean water, collective bargaining, Columbian Exchange, Columbine, Corn Laws, credit crunch, Credit Default Swap, crony capitalism, currency peg, debt deflation, Deng Xiaoping, discovery of the americas, Donald Trump, Erik Brynjolfsson, European colonialism, eurozone crisis, falling living standards, financial innovation, financial intermediation, floating exchange rates, Fractional reserve banking, Frederick Winslow Taylor, full employment, germ theory of disease, German hyperinflation, gig economy, Gini coefficient, global supply chain, global value chain, Gordon Gekko, greed is good, Haber-Bosch Process, Hans Rosling, Hernando de Soto, hydraulic fracturing, Ignaz Semmelweis: hand washing, income inequality, income per capita, indoor plumbing, industrial robot, inflation targeting, Isaac Newton, James Watt: steam engine, job automation, John Snow's cholera map, joint-stock company, joint-stock limited liability company, Kenneth Arrow, Kula ring, labour market flexibility, land reform, land tenure, Lao Tzu, large denomination, liquidity trap, Long Term Capital Management, Louis Blériot, low cost airline, low skilled workers, lump of labour, M-Pesa, Malcom McLean invented shipping containers, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Martin Wolf, McJob, means of production, Mikhail Gorbachev, mittelstand, moral hazard, Murano, Venice glass, Myron Scholes, Nelson Mandela, Network effects, Northern Rock, oil shale / tar sands, oil shock, Paul Samuelson, popular capitalism, popular electronics, price stability, principal–agent problem, profit maximization, purchasing power parity, quantitative easing, railway mania, Ralph Nader, regulatory arbitrage, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, Scramble for Africa, Second Machine Age, secular stagnation, Silicon Valley, Simon Kuznets, South China Sea, South Sea Bubble, special drawing rights, spice trade, spinning jenny, Steven Pinker, TaskRabbit, Thales and the olive presses, Thales of Miletus, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, trade route, transaction costs, transatlantic slave trade, transcontinental railway, Triangle Shirtwaist Factory, universal basic income, Unsafe at Any Speed, Upton Sinclair, V2 rocket, Veblen good, War on Poverty, Washington Consensus, Watson beat the top human players on Jeopardy!, women in the workforce, Yom Kippur War, zero-sum game

A series of predators, like T. Boone Pickens, Carl Icahn and Ivan Boesky, made headlines by taking significant stakes in businesses in a practice known as “greenmail”; either the existing management would buy them out at a profit, or another predator would use their stake as the basis of a deal. The process was dramatised in the film Wall Street, in which Michael Douglas’s character, Gordon Gekko, proclaims that “Greed is good.” The main function of the takeover wave was to break up conglomerates and force companies to focus on a single industry. (The argument was that conglomerates were inefficient; shareholders could get the benefits of diversification by investing in a wide range of companies.)30 The value of takeover deals in the US in the 1980s was $1.3trn and 28% of the country’s largest 500 companies in 1980 had been bought by the end of the decade.


pages: 553 words: 168,111

The Asylum: The Renegades Who Hijacked the World's Oil Market by Leah McGrath Goodman

anti-communist, Asian financial crisis, automated trading system, banking crisis, barriers to entry, Bernie Madoff, computerized trading, corporate governance, corporate raider, credit crunch, Credit Default Swap, East Village, energy security, Etonian, family office, Flash crash, global reserve currency, greed is good, High speed trading, light touch regulation, market fundamentalism, peak oil, Peter Thiel, pre–internet, price mechanism, profit motive, regulatory arbitrage, reserve currency, rolodex, Ronald Reagan, side project, Silicon Valley, upwardly mobile, zero-sum game

It’s take the trade, turn it around, take the profit. It’s all paper to us. People have this romantic, menopausal idea about our market, that it’s historic and we’re rugged individualists. Forget about it. Most of us don’t see it that way. I don’t care about the exchange. Nobody does. We’ve never taken a step back and seen this as something bigger. We are traders. We only think in the short term. There’s a line from the movie Wall Street—‘Greed is good.’ We were greedy. But here’s the thing: Nymex is a microcosm of life. We’re different ethnicities, from different backgrounds. We all have our own agendas. And we’re all battling it out in one place, just trying to make it.” Living at the Plaza in New York, Sahn still trades and keeps in touch with old friends like Mark Fisher, who owns a home near Sahn’s in the Hamptons. Orthodox Jewish Trader “In the beginning, the average local was happy to make markets and bring home $100,000 to $300,000 a year.


pages: 522 words: 162,310

Fantasyland: How America Went Haywire: A 500-Year History by Kurt Andersen

affirmative action, Albert Einstein, animal electricity, anti-communist, Any sufficiently advanced technology is indistinguishable from magic, augmented reality, back-to-the-land, Bernie Sanders, British Empire, Burning Man, California gold rush, Celebration, Florida, centre right, cognitive dissonance, Columbine, corporate governance, Credit Default Swap, David Brooks, delayed gratification, dematerialisation, disintermediation, disruptive innovation, Donald Trump, Donner party, Downton Abbey, Edward Snowden, Electric Kool-Aid Acid Test, failed state, Ferguson, Missouri, God and Mammon, Gordon Gekko, greed is good, high net worth, illegal immigration, invisible hand, Isaac Newton, John von Neumann, Kickstarter, large denomination, Mark Zuckerberg, market fundamentalism, McMansion, Mikhail Gorbachev, Minecraft, moral panic, mutually assured destruction, new economy, New Urbanism, Norman Mailer, placebo effect, pre–internet, Ralph Waldo Emerson, RAND corporation, Ronald Reagan, Silicon Valley, smart meter, Snapchat, South Sea Bubble, Steve Jobs, Ted Kaczynski, the scientific method, Thomas Kuhn: the structure of scientific revolutions, trade route, transcontinental railway, urban renewal, Whole Earth Catalog, WikiLeaks, Y2K, young professional

For them, the ultraindividualist liberation of the 1960s and ’70s had generated a kind of fundamentalist religious faith in markets, and thus an absolute knee-jerk opposition to any attempts by government to make markets work better or more fairly, and to taxes in general. If the new hypercapitalism was working well for you, even if you had no fervent ideological faith in markets, what had previously come across as simple selfishness could now be cloaked in righteousness. “Greed is good,” the fictional Gordon Gekko declared in 1987, but now real people insisted that their moneymaking lust and skill were not merely useful in the aggregate but made them virtuous individually. The year after Wall Street came out, Reagan was reelected in one of the biggest landslides in history. Oh, Ronald Reagan, lovable, shrewd, twinkly, out-of-it, blithe, brilliant Ronald Reagan. The transmutation of presidential politics and governing into entertainment had started a generation earlier, in the 1960s, with John Kennedy.


pages: 614 words: 174,226

The Economists' Hour: How the False Prophets of Free Markets Fractured Our Society by Binyamin Appelbaum

"Robert Solow", airline deregulation, Alvin Roth, Andrei Shleifer, anti-communist, battle of ideas, Benoit Mandelbrot, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, Celtic Tiger, central bank independence, clean water, collective bargaining, Corn Laws, correlation does not imply causation, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, desegregation, Diane Coyle, Donald Trump, ending welfare as we know it, financial deregulation, financial innovation, fixed income, floating exchange rates, full employment, George Akerlof, George Gilder, Gini coefficient, greed is good, Growth in a Time of Debt, income inequality, income per capita, index fund, inflation targeting, invisible hand, Isaac Newton, Jean Tirole, John Markoff, Kenneth Arrow, Kenneth Rogoff, land reform, Long Term Capital Management, low cost airline, manufacturing employment, means of production, Menlo Park, minimum wage unemployment, Mohammed Bouazizi, money market fund, Mont Pelerin Society, Network effects, new economy, oil shock, Paul Samuelson, Philip Mirowski, plutocrats, Plutocrats, price stability, profit motive, Ralph Nader, RAND corporation, rent control, rent-seeking, Richard Thaler, road to serfdom, Robert Bork, Robert Gordon, Ronald Coase, Ronald Reagan, Sam Peltzman, Silicon Valley, Simon Kuznets, starchitect, Steve Jobs, supply-chain management, The Chicago School, The Great Moderation, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, transaction costs, trickle-down economics, ultimatum game, Unsafe at Any Speed, urban renewal, War on Poverty, Washington Consensus

And this was true in a world where productivity barely increased over time: the medieval system of guilds limited entry to skilled crafts because there was only so much demand for bread in Rouen.32 But Adam Smith recognized that the industrial revolution had altered this reality. As productivity increased, wealth could be accumulated by increasing the size of the economy. Being selfish could be good for everyone. It’s worth emphasizing that Smith did not think selfishness was always good for society. But economics has roughly the same relationship with its founding texts as the world’s other great religions. Smith’s nuanced accounting became “Greed is good,” which has proved to be a world-conquering credo, among both the wealthy and the many who aspire to join them. Proponents of faith in markets also developed a close relationship with the corporate elite, which was not as inevitable as it may seem in retrospect. Conservative economists like Friedman and his close friend George Stigler initially expressed fear of corporate power and argued that restraining corporate concentration was one of the few legitimate functions of government.


pages: 741 words: 179,454

Extreme Money: Masters of the Universe and the Cult of Risk by Satyajit Das

affirmative action, Albert Einstein, algorithmic trading, Andy Kessler, Asian financial crisis, asset allocation, asset-backed security, bank run, banking crisis, banks create money, Basel III, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Bonfire of the Vanities, bonus culture, Bretton Woods, BRICs, British Empire, business cycle, capital asset pricing model, Carmen Reinhart, carried interest, Celtic Tiger, clean water, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, corporate raider, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Daniel Kahneman / Amos Tversky, debt deflation, Deng Xiaoping, deskilling, discrete time, diversification, diversified portfolio, Doomsday Clock, Edward Thorp, Emanuel Derman, en.wikipedia.org, Eugene Fama: efficient market hypothesis, eurozone crisis, Everybody Ought to Be Rich, Fall of the Berlin Wall, financial independence, financial innovation, financial thriller, fixed income, full employment, global reserve currency, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, happiness index / gross national happiness, haute cuisine, high net worth, Hyman Minsky, index fund, information asymmetry, interest rate swap, invention of the wheel, invisible hand, Isaac Newton, job automation, Johann Wolfgang von Goethe, John Meriwether, joint-stock company, Jones Act, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kevin Kelly, laissez-faire capitalism, load shedding, locking in a profit, Long Term Capital Management, Louis Bachelier, margin call, market bubble, market fundamentalism, Marshall McLuhan, Martin Wolf, mega-rich, merger arbitrage, Mikhail Gorbachev, Milgram experiment, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, mutually assured destruction, Myron Scholes, Naomi Klein, negative equity, NetJets, Network effects, new economy, Nick Leeson, Nixon shock, Northern Rock, nuclear winter, oil shock, Own Your Own Home, Paul Samuelson, pets.com, Philip Mirowski, plutocrats, Plutocrats, Ponzi scheme, price anchoring, price stability, profit maximization, quantitative easing, quantitative trading / quantitative finance, Ralph Nader, RAND corporation, random walk, Ray Kurzweil, regulatory arbitrage, rent control, rent-seeking, reserve currency, Richard Feynman, Richard Thaler, Right to Buy, risk-adjusted returns, risk/return, road to serfdom, Robert Shiller, Robert Shiller, Rod Stewart played at Stephen Schwarzman birthday party, rolodex, Ronald Reagan, Ronald Reagan: Tear down this wall, Satyajit Das, savings glut, shareholder value, Sharpe ratio, short selling, Silicon Valley, six sigma, Slavoj Žižek, South Sea Bubble, special economic zone, statistical model, Stephen Hawking, Steve Jobs, survivorship bias, The Chicago School, The Great Moderation, the market place, the medium is the message, The Myth of the Rational Market, The Nature of the Firm, the new new thing, The Predators' Ball, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, trickle-down economics, Turing test, Upton Sinclair, value at risk, Yogi Berra, zero-coupon bond, zero-sum game

The New York Times dubbed Rand the “novelist Laureate” of the Reagan administration, citing her influence on Greenspan.13 Paul Samuelson, the economist, recalled that: The trouble is that [Greenspan] had been an Ayn Rander. You can take the boy out of the cult but you can’t take the cult out of the boy. He actually had instructions, probably pinned on the wall: “Nothing from this office should go forth which discredits the capitalist system. Greed is good.”14 Like his mentor, Greenspan was his own splendid creation. Celebrity Central Banking Greenspan reveled in the age of celebrity central bankers: “The only central bankers ever to achieve...rock star status.... No one has yet credited Alan Greenspan with the fall of the Soviet Union or the rise of the Boston Red Sox, although both may come in time as the legend grows.”15 In 2000, U.S.


pages: 613 words: 181,605

Circle of Greed: The Spectacular Rise and Fall of the Lawyer Who Brought Corporate America to Its Knees by Patrick Dillon, Carl M. Cannon

accounting loophole / creative accounting, affirmative action, Bernie Madoff, buy and hold, collective bargaining, Columbine, computer age, corporate governance, corporate raider, desegregation, energy security, estate planning, Exxon Valdez, fear of failure, fixed income, Gordon Gekko, greed is good, illegal immigration, index fund, John Markoff, mandatory minimum, margin call, Maui Hawaii, money market fund, new economy, oil shale / tar sands, Ponzi scheme, Ralph Nader, rolodex, Ronald Reagan, Sand Hill Road, Silicon Valley, Silicon Valley startup, Steve Jobs, the High Line, the market place, white picket fence, Works Progress Administration, zero-sum game

But how could Milberg Weiss become more protean, like the most successful companies, including those he’d sued? The reality of the past two years, at least the way he saw it, was that the courts and lawmakers had made it easier to get away with fraud. When men like John Doerr uttered phrases such as “growth is good,” they meant that innovation, jobs, and profits were good for the U.S. economy. But that wasn’t how Lerach interpreted it. Greed is good—that was what Lerach heard. “As long as greed is a growth industry we’re in business.” Mel Weiss had said that, such a long time ago. Now the skids had been greased. Greed was definitely going to grow. * Wilson’s departure from Washington created a vacancy that was filled after a brief interregnum—by Feinstein—in a 1992 special election. * Lerach had never spent the night in the Lincoln Bedroom and wouldn’t be an overnight guest in the White House for four more years, but the Clinton-Gore fund-raising scandal was beginning to break, which Lerach knew.


pages: 686 words: 201,972

Drink: A Cultural History of Alcohol by Iain Gately

barriers to entry, British Empire, California gold rush, corporate raider, delayed gratification, Deng Xiaoping, Edward Lloyd's coffeehouse, Fellow of the Royal Society, Gordon Gekko, greed is good, Haight Ashbury, Hernando de Soto, imperial preference, invisible hand, joint-stock company, Jones Act, Louis Pasteur, megacity, music of the spheres, Norman Mailer, Peace of Westphalia, post-work, refrigerator car, Ronald Reagan, South Sea Bubble, spice trade, strikebreaker, the scientific method, Tim Cook: Apple, trade route, traveling salesman, Upton Sinclair, V2 rocket, working poor

“Lunch is for wimps,” he declares at their first encounter, and Bud pointedly calls for Evian when he meets Gekko in a restaurant at night. The old order is represented by Bud’s father, a union leader at Bluestar Airlines, who does his business with the men he represents over a few beers in the local bar. Gekko aims to take over Bluestar in order to break it into pieces and rob its pension fund, and Bud is forced to choose between old-fashioned beer-drinking, metal-bashing America and the greed-is-good philosophy of Gordon Gekko. After a bottle of whiskey he decides to do the right thing—intoxication leads to an epiphany that restores his moral perspective. There were genuine monetary benefits to be gained from alcohol-free workplaces. Companies that introduced such policies found their workers had fewer accidents, thus reducing insurance premiums and compensation payments, and that they had to sack fewer workers for drunkenness, enabling savings in termination costs and the expenses of recruiting replacements.


pages: 716 words: 192,143

The Enlightened Capitalists by James O'Toole

activist fund / activist shareholder / activist investor, anti-communist, Ayatollah Khomeini, Bernie Madoff, British Empire, business cycle, business process, California gold rush, carbon footprint, City Beautiful movement, collective bargaining, corporate governance, corporate social responsibility, Credit Default Swap, crowdsourcing, cryptocurrency, desegregation, Donald Trump, double entry bookkeeping, end world poverty, equal pay for equal work, Frederick Winslow Taylor, full employment, garden city movement, germ theory of disease, glass ceiling, God and Mammon, greed is good, hiring and firing, income inequality, indoor plumbing, inventory management, invisible hand, James Hargreaves, job satisfaction, joint-stock company, Kickstarter, knowledge worker, Lao Tzu, longitudinal study, Louis Pasteur, Lyft, means of production, Menlo Park, North Sea oil, passive investing, Ponzi scheme, profit maximization, profit motive, Ralph Waldo Emerson, rolodex, Ronald Reagan, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, Socratic dialogue, sovereign wealth fund, spinning jenny, Steve Jobs, Steve Wozniak, stocks for the long run, stocks for the long term, The Fortune at the Bottom of the Pyramid, The Wealth of Nations by Adam Smith, Tim Cook: Apple, traveling salesman, Uber and Lyft, uber lyft, union organizing, Vanguard fund, white flight, women in the workforce, young professional

The time for all this is not yet. For at least another hundred years we must pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight. Hence, until universal prosperity is achieved, Keynes argued, greed is good and the road to heaven is paved with bad intentions, because the profit motive creates the wealth of nations and civilizations. That is a major reason why leaders of companies who have sought to engage in social activities not directly intended to produce profit have been viewed, at best, as overly idealistic or misguided. The accepted wisdom has been that business leaders who take their eyes off the singular goal of profit will ultimately fail at the hands of competitors who stay focused on serving their customers.


pages: 756 words: 228,797

Ayn Rand and the World She Made by Anne C. Heller

affirmative action, Albert Einstein, American ideology, anti-communist, Bolshevik threat, Charles Lindbergh, conceptual framework, greed is good, laissez-faire capitalism, Milgram experiment, money market fund, Mont Pelerin Society, New Journalism, open borders, price stability, profit motive, rent control, rolodex, Ronald Reagan, Silicon Valley, the scientific method, theory of mind, Thorstein Veblen, transcontinental railway, upwardly mobile, wage slave, War on Poverty, Works Progress Administration, young professional

Kennedy inaugurated an era of unparalleled American prosperity, new cultural freedoms, increased spending on social programs, and the beginnings of a distant, controversial war, Nathaniel and, to a lesser degree, Barbara established a smaller, safer sphere for their benefactor to inhabit. The proud sufferer asked her two friends not to discuss her depression with the others, so most of her followers knew little or nothing about the extremity of her moods. But they understood that she, and they, were almost universally derided as hate-mongering greed-is-good neo-Fascists and social Darwinists, when they knew themselves to be visionaries of freedom and progress. Some lost friends. Some, like Leonard Peikoff, experienced their parents’ disapproval or estrangement. “How is it possible that we can be accused of advocating, politically, the exact opposite of what we stand for?” they said among themselves after lectures and on Saturday nights. They concluded that, like Roark, they were being punished for their virtues and that the outside world hated and feared them for trumpeting the moral good.


pages: 721 words: 238,678

Fall Out: A Year of Political Mayhem by Tim Shipman

banking crisis, Beeching cuts, Bernie Sanders, Boris Johnson, centre right, Clapham omnibus, Corn Laws, corporate governance, Dominic Cummings, Donald Trump, drone strike, Etonian, eurozone crisis, Gordon Gekko, greed is good, iterative process, John Bercow, Kickstarter, kremlinology, land value tax, mutually assured destruction, Neil Kinnock, new economy, non-tariff barriers, offshore financial centre, open borders, quantitative easing, Ronald Reagan, Snapchat, working poor

On a WhatsApp group shared by Eurosceptic MPs, Sir Gerald Howarth wrote with withering sarcasm, ‘A man of his immense ability can surely speak for Cheshire and London before lunch, advise BlackRock over lunch and tender his invaluable advice to the House after lunch before holding a dinner party for the bien pensant remainians of Notting Hill in the evening. Sorted.’ Iain Duncan Smith posted a picture of Michael Douglas’s character from the film Wall Street, the celluloid monument to eighties excess: ‘Hmmm … why do I keep thinking of Gordon Gekko … greed is good.’ Osborne’s reputation for ruthlessness was confirmed when it emerged that he had recommended the political journalist Matthew d’Ancona to Evgeny Lebedev, the owner of the Standard. D’Ancona was on the verge of getting the job when Osborne decided he fancied it himself.1 Seeing the benefit of having a big name in the post, Lebedev was ‘immediately sold on the idea’. The prime minister’s official spokesman, James Slack, was rendered speechless when the news was broken to him in his regular morning briefing.


pages: 898 words: 266,274

The Irrational Bundle by Dan Ariely

accounting loophole / creative accounting, air freight, Albert Einstein, Alvin Roth, assortative mating, banking crisis, Bernie Madoff, Black Swan, Broken windows theory, Burning Man, business process, cashless society, Cass Sunstein, clean water, cognitive dissonance, computer vision, corporate governance, credit crunch, Credit Default Swap, Daniel Kahneman / Amos Tversky, delayed gratification, Donald Trump, end world poverty, endowment effect, Exxon Valdez, first-price auction, Frederick Winslow Taylor, fudge factor, George Akerlof, Gordon Gekko, greed is good, happiness index / gross national happiness, hedonic treadmill, IKEA effect, Jean Tirole, job satisfaction, Kenneth Arrow, knowledge economy, knowledge worker, lake wobegon effect, late fees, loss aversion, Murray Gell-Mann, new economy, Peter Singer: altruism, placebo effect, price anchoring, Richard Feynman, Richard Thaler, Saturday Night Live, Schrödinger's Cat, second-price auction, Shai Danziger, shareholder value, Silicon Valley, Skype, software as a service, Steve Jobs, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, ultimatum game, Upton Sinclair, Walter Mischel, young professional

The scary thought is that if we did the experiments with nonmonetary currencies that were not as immediately convertible into money as tokens, or with individuals who cared less about their honesty, or with behavior that was not so publicly observable, we would most likely have found even higher levels of dishonesty. In other words, the level of deception we observed here is probably an underestimation of the level of deception we would find across a variety of circumstances and individuals. Now suppose that you have a company or a division of a company led by a Gordon Gekko character who declares that “greed is good.” And suppose he used nonmonetary means of encouraging dishonesty. Can you see how such a swashbuckler could change the mind-set of people who in principle want to be honest and want to see themselves as honest, but also want to hold on to their jobs and get ahead in the world? It is under just such circumstances that nonmonetary currencies can lead us astray. They let us bypass our conscience and freely explore the benefits of dishonesty.


pages: 764 words: 261,694

The Elements of Statistical Learning (Springer Series in Statistics) by Trevor Hastie, Robert Tibshirani, Jerome Friedman

Bayesian statistics, bioinformatics, computer age, conceptual framework, correlation coefficient, G4S, greed is good, linear programming, p-value, pattern recognition, random walk, selection bias, speech recognition, statistical model, stochastic process, The Wisdom of Crowds

Class prediction by nearest shrunken centroids, with applications to DNA microarrays, Statistical Science 18(1): 104–117. Tibshirani, R., Saunders, M., Rosset, S., Zhu, J. and Knight, K. (2005). Sparsity and smoothness via the fused lasso, Journal of the Royal Statistical Society, Series B 67: 91–108. Tibshirani, R., Walther, G. and Hastie, T. (2001b). Estimating the number of clusters in a dataset via the gap statistic, Journal of the Royal Statistical Society, Series B. 32(2): 411–423. Tropp, J. (2004). Greed is good: algorithmic results for sparse approximation, IEEE Transactions on Information Theory 50: 2231– 2242. References 725 Tropp, J. (2006). Just relax: convex programming methods for identifying sparse signals in noise, IEEE Transactions on Information Theory 52: 1030–1051. Valiant, L. G. (1984). A theory of the learnable, Communications of the ACM 27: 1134–1142. van der Merwe, A. and Zidek, J. (1980).


pages: 913 words: 265,787

How the Mind Works by Steven Pinker

affirmative action, agricultural Revolution, Alfred Russel Wallace, Buckminster Fuller, cognitive dissonance, Columbine, combinatorial explosion, complexity theory, computer age, computer vision, Daniel Kahneman / Amos Tversky, delayed gratification, double helix, experimental subject, feminist movement, four colour theorem, Gordon Gekko, greed is good, hedonic treadmill, Henri Poincaré, income per capita, information retrieval, invention of agriculture, invention of the wheel, Johannes Kepler, John von Neumann, lake wobegon effect, lateral thinking, Machine translation of "The spirit is willing, but the flesh is weak." to Russian and back, Mikhail Gorbachev, Murray Gell-Mann, mutually assured destruction, Necker cube, out of africa, pattern recognition, phenotype, plutocrats, Plutocrats, random walk, Richard Feynman, Ronald Reagan, Rubik’s Cube, Saturday Night Live, scientific worldview, Search for Extraterrestrial Intelligence, sexual politics, social intelligence, Steven Pinker, theory of mind, Thorstein Veblen, Turing machine, urban decay, Yogi Berra

It’s easy to see why nature documentaries, with their laudable conservationist ethic, disseminate the agitprop that animals act in the interests of the group. One subtext is, Don’t hate the wolf that just ate Bambi; he’s acting for the greater good. The other is, Protecting the environment is nature’s way; we humans had better shape up. The opposing theory of the selfish gene has been bitterly attacked out of the fear that it vindicates the philosophy of Gordon Gekko in Wall Street: greed is good, greed works. Then there are those who believe in selfish genes but urge us to face up to the sad truth: at heart, Mother Teresa is really selfish. I think moralistic science is bad for morals and bad for science. Surely paving Yosemite is unwise, Gordon Gekko is bad, and Mother Teresa is good regardless of what came out in the latest biology journals. But I suppose it is only human to feel a frisson when learning about what made us what we are.


pages: 1,013 words: 302,015

A Classless Society: Britain in the 1990s by Alwyn W. Turner

Berlin Wall, Bob Geldof, Boris Johnson, British Empire, call centre, centre right, deindustrialization, demand response, Desert Island Discs, endogenous growth, Etonian, eurozone crisis, facts on the ground, Fall of the Berlin Wall, falling living standards, first-past-the-post, Francis Fukuyama: the end of history, friendly fire, full employment, global village, greed is good, inflation targeting, lateral thinking, means of production, millennium bug, minimum wage unemployment, moral panic, negative equity, Neil Kinnock, Nelson Mandela, offshore financial centre, old-boy network, period drama, Ronald Reagan, sexual politics, Stephen Hawking, upwardly mobile, Winter of Discontent, women in the workforce

Baddiel was convulsed with fits of laughter, and later reflected: ‘I think it was at that point that the eighties fell away for me, or at least that seriousness fell away for me, seriousness as in that adolescent, or post-adolescent, concern about everything. I was never going to be intense again.’ Seriousness had indeed been the keynote of the 1980s counterculture. The era may have seen the rise of yuppies, power-dressing and the creed of ‘greed is good’, as articulated by Gordon Gecko in the film Wall Street, but for many the experience was very different. It was a decade that started and ended with devastating recessions, and which seemed to lurch from one apocalyptic fear to another: the Cold War rhetoric of Margaret Thatcher and American president Ronald Reagan was matched by dire warnings about environmental destruction – whether centred on acid rain, the depletion of the ozone layer or global warming – while the arrival of AIDS threatened a health crisis of proportions not seen for decades.


pages: 1,073 words: 314,528

Strategy: A History by Lawrence Freedman

Albert Einstein, anti-communist, Anton Chekhov, Ayatollah Khomeini, barriers to entry, battle of ideas, Black Swan, British Empire, business process, butterfly effect, centre right, Charles Lindbergh, circulation of elites, cognitive dissonance, coherent worldview, collective bargaining, complexity theory, conceptual framework, corporate raider, correlation does not imply causation, creative destruction, cuban missile crisis, Daniel Kahneman / Amos Tversky, defense in depth, desegregation, Edward Lorenz: Chaos theory, en.wikipedia.org, endogenous growth, endowment effect, Ford paid five dollars a day, framing effect, Frederick Winslow Taylor, Gordon Gekko, greed is good, information retrieval, interchangeable parts, invisible hand, John Nash: game theory, John von Neumann, Kenneth Arrow, lateral thinking, linear programming, loose coupling, loss aversion, Mahatma Gandhi, means of production, mental accounting, Murray Gell-Mann, mutually assured destruction, Nash equilibrium, Nelson Mandela, Norbert Wiener, Norman Mailer, oil shock, Pareto efficiency, performance metric, Philip Mirowski, prisoner's dilemma, profit maximization, race to the bottom, Ralph Nader, RAND corporation, Richard Thaler, road to serfdom, Ronald Reagan, Rosa Parks, shareholder value, social intelligence, Steven Pinker, strikebreaker, The Chicago School, The Myth of the Rational Market, the scientific method, theory of mind, Thomas Davenport, Thomas Kuhn: the structure of scientific revolutions, Torches of Freedom, Toyota Production System, transaction costs, ultimatum game, unemployed young men, Upton Sinclair, urban sprawl, Vilfredo Pareto, War on Poverty, women in the workforce, Yogi Berra, zero-sum game

Fox later used Sun Tzu to prevail over Gekko: “If your enemy is superior, evade him. If angry, irritate him. If equally matched, fight, and if not, split and re-evaluate.” Wall Street was a morality tale involving junior stockbroker Bud Fox caught between his blue-collar father, a foreman and trade unionist who represented the virtues of hard and honest labor, and the ruthless, cynical Gordon Gekko, a corporate raider whose motto was “greed is good.” Bud became wealthy by following Gekko’s methods until he realized that a plan to buy the airline where his father worked was all about asset-stripping. The movie appeared in 1987, the year of a Wall Street crash, and seemed to capture the financial mindset that had created both financial mayhem and a loss of moral bearings. Another villain, Tony Soprano, the eponymous mob boss in The Sopranos, was told, somewhat sarcastically, by his psychiatrist Dr.


The Transformation Of Ireland 1900-2000 by Diarmaid Ferriter

anti-communist, Bob Geldof, British Empire, Celtic Tiger, collective bargaining, deliberate practice, edge city, falling living standards, financial independence, ghettoisation, greed is good, hiring and firing, housing crisis, immigration reform, income per capita, land reform, manufacturing employment, moral panic, New Journalism, New Urbanism, offshore financial centre, open economy, postnationalism / post nation state, sensible shoes, the market place, upwardly mobile, urban renewal, wage slave, women in the workforce

At a time when Margaret Thatcher was intent on destroying the trade union movement in Britain and proudly proclaimed that ‘there is no such thing as society’ the political leadership of this state opted for partnership between government, employees and unions. At the same time, many community organisations – some of the most important attached to the Catholic Church – ensured that the principle of ‘greed is good’ could not be elevated into a core principle of any political party, not even the allegedly Thatcherite Progressive Democrats.52 This raises the question of ideology and the extent to which, historically, there were any real differences between the Irish political parties. James Dillon asked the Dáil in 1951: ‘what ideological differences, if words retain their meaning, divide any two deputies on any side of this house?’