Greed is Good …. The Parable from Wall Street!

It was in my freshman undergraduate year that I watched Oliver Stone’s ‘Wall Street’ and was thoroughly impressed by the ‘style’ of the ‘Street’ not to mention Michael Douglas’ Gordon Gekko character that personifies the summary and celebration of free market capitalism (“I am not talking about the regular Wall Street stiff, flying first class and being comfortable, I am talking liquid! Rich enough to own your own jet, rich enough not to waste time. 50, a 100 million a year.. a player!)

. The movie closes with Gekko ending up in prison but not before very successfully hammering down ‘Greed’ as a ‘Virtue’ for the continued innovation and evolution of mankind and human spirit! I hear that a sequel might be in the works with Gekko (now a free man!) emerging in today’s financial hotspot … Shanghai, China!

. Lets ponder on Greed though – I want to do this because of the potentially negative label that the word carries stemming from the seven deadly sins! I tend to some what agree with Gordon Gekko’s summation. The manifestation of Greed emerges from the individual’s perspective of the word. Every achievement of any proportion arises out of greed … greed drives desire, leading to focused actions, which leads to results. Greed therefore leads to actual results that benefit an individual, a group, community, nation or mankind depending on the intensity of the action!

. The scale and the benefit that the ‘greed’ led action drives defines the nature of ‘greed’ and is possibly what Gordon Gekko was alluding to when he labelled it as ‘Good’. From Aristotle, Archimedes, Gandhi, Luther King, Edison, Gates, Jobs to even Mr. Buffet, there is an incredible internal motivation to build innovative ‘models’ in tech, human rights, government and finance followed by superior execution that provides ‘ incremental value’ to millions of people over decades – much more than initially perceived

. So what is that ‘internal motivation’ that led these individuals to do what they did? Controversial as it may sound, seems like it was ‘Greed’ (as in ‘an intense desire with a perceivable outcome’) for accomplishing their objective that gave meaning to their lives and defined their destinies. In the process they positively touched generations around the world. This greed (whilst not totally ‘Selfless’) does not seem bitter rather it sounds ‘Good’ to most of us!

. On the other hand as the world today reels under the largest financial catastrophe of our lifetime, I question were ‘Greed’ sits in the equation. The Sub prime mortgages, the collateralized debt obligations and the leveraged positions that are breaking the largest financial institutions were not meant to be what they finally evolved into! So who and what led that evolution … well it is the other form of ‘Greed’ … the stuff that sent Gekko behind bars!

. So how is this form of greed different? Well, it still drives massive benefits but specifically to an individual or a small group of individuals at the expense of a much larger majority! “While Richard Fuld of Lehman was pleading with Secy. Paulson for Federal rescue, Lehman was recommending to its compensation committee four days before bankruptcy filing that three departing execs should receive more than 20 million in “special payments” (Straits Time Singapore, 8 Oct 08). Another example of how this industry squandered on executive compensation at the expense of the hapless shareholders and the tax payer in general who has to contribute to the 700 billion bailout package to save the US economy

. I fervently hope that we will see collaboration between the government, regulators and the industry worldwide to tidy over this mess as quickly as possible with not too severe global impact! (I am the eternal optimist). I am also quite certain that in the aftermath of this debacle more stringent governance measures will be implemented as the pendulum shifts to the other extreme! Massive changes in work processes will be implemented and workflow will get more complicated and long drawn … learning from our mistakes is laudable, all good stuff!

. The ultimate test however will be TIME and the human nature … so we are back to ‘Greed’. Greed will drive humanity again into taking little chances, small shifts from the dictum in the name of innovation and value creation to drive the economy and the industry! Government, regulators and the industry will all be drawn into the party till we are hit by another tidal wave … the cycle will be complete!

. Good or bad, ‘Greed’ will live on and we will have to learn to deal with the Gordon Gekko…..