> "The point is, ladies and gentleman, that greed, for lack
of a better word, is good." ... few people know that these words are based
on an actual commencement speech delivered in 1986 at The speaker? Ivan Boesky, who would be convicted just eighteen months later in an insider trading scandal.
> "The point is, ladies and gentleman, that greed, for lack of a better word, is good."
The whole paragraph from where that line is extracted:
> Teldar Paper, Mr. Cromwell, Teldar Paper has 33 different vice presidents each earning over 200 thousand dollars a year. Now, I have spent the last two months analyzing what all these guys do, and I still can't figure it out. One thing I do know is that our paper company lost 110 million dollars last year, and I'll bet that half of that was spent in all the paperwork going back and forth between all these vice presidents. [some chuckles from audience] The new law of evolution in corporate America seems to be survival of the unfittest. Well, in my book you either do it right or you get eliminated. In the last seven deals that I've been involved with, there were 2.5 million stockholders who have made a pretax profit of 12 billion dollars. [applause] Thank you. I am not a destroyer of companies. I am a liberator of them! The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA. Thank you very much.
Boesky was born to a Jewish family in Detroit. His family owned several delicatessens and taverns in the city. Although he lacked an undergraduate degree, he was admitted to Detroit College of Law (now Michigan State University College of Law) and graduated in 1965. In the 1980s, Boesky served as an adjunct professor at Columbia University's Graduate School of Business and at New York University's Graduate School of Business.
Time magazine ran a December 1, 1986, cover story about his "scam," dubbing him "Ivan the Terrible."[11]
Per a plea bargain, he received a prison sentence of 3+1⁄2 years and was fined US$100 million. Although he was released after serving only 20 months, he was permanently prohibited from working with securities. He served his sentence at Lompoc Federal Prison Camp near Vandenberg Air Force Base in California.
Boesky smoked Marlboro cigarettes and lived till 87 yrs.
Boesky was also featured in Titans The Rise of Wall Street on Amazon Prime
The whole character and his role in pop culture I find very frustrating.
The guy is the antagonist in the movie so you're not supposed to like him and he's written that way. He's a strawman and his whole speech is how the real version of him would sound filtered through the ears of someone who disagreed with him.
So you end up with people holding him up as an example that disagree and agree with him but the both of those groups are choosing the sides of a caricature that doesn't understand the point he's trying to make. It's weird.
It's the problem with most Oliver Stone movies, Scorsese movies, and many other directors: the premise of the film requires a charismatic antihero, and therefore the "bad guy" becomes cool and popular.
The directors always try to avoid this criticism by saying, "Well he goes to jail in the end," but I think it's a bit of a cop out.
I tend to agree with the idea that art should try to embody some moral values, which goes against a lot of contemporary thoughts on aesthetics. But I think it’s a basic fact that people look toward fictional characters as role models, directly or indirectly. Avoiding that responsibility is not good.
> I think it’s a basic fact that people look toward fictional characters as role models
I think it's closer to "monkey see, monkey do".
After the Fast and The Furious movies, young men would street race home from the movie.
After watching the movie The Program, young men laid down in the street at night hoping not to get hit by traffic (copying the risky stunt the characters in the movie did).
The art simply shows what is, not what should be.
The Sopranos was interesting because it showed a mob boss doing the typical mob boss things (dodging FBI surveillance, dealing with rival crime families and street thugs, organizing new business ventures, burying evidence deep in the woods / dumping in the river). But it also showed a man with momma issues, with panic attacks, processing (well mostly rejecting) therapy, a wife who spends too much, a son as dumb as a box of rocks, etc. It wasn't the broad morality of western societies, but it was approachable because the character was eminently human.
Similarly, Dexter was a serial murderer, but he had "a code" (to only murder other serial murderers). His code doesn't necessarily match up with the morals of you or I, but like any fiction, it allows you to suspect your disbelief and inhabit the moral choices / predicaments of the character for a few minutes / hours.
> The directors always try to avoid this criticism by saying, "Well he goes to jail in the end," but I think it's a bit of a cop out
I don’t know which directors you’re referring to, but I doubt you receieved such a simplistic response from Scorcese. Worth reading him in his own words on this, below is what he said regarding Jordan Belfort’s character in The Wolf of Wall Street,
“That's something that I've always been attracted to and is interesting to me. Someone like Jordan or Jake Lamotta or Tommy, Joe Pesci’s character in Goodfellas, and people say well that type of person that sort but… I guess what that means is that they try to distance themselves from them. It's someone else it's not me but in actuality I feel it's not someone else, it's us. It's you and me and maybe if we'd been born under different circumstances, maybe we would have wound up making the same, exactly the same mistakes and choices and doing exactly the same things. I really think … when people say “that kind,” it’s not a matter of equalizing everyone and saying we're all responsible, I think it's a matter of facing and recognizing and acknowledging that part of us which is a part of our common humanity. And we have to deal with it.”
“He [Jordan Belfort] thought that he could bypass morality or surpass morality with a combination of money and drugs. I don't know maybe he still does, I really don't know. There's another way of answering the question; he was different from Madoff and Skilling in that they weren't crashing helicopters or throwing little people (or maybe they were but if they did they kept it pretty quiet) but in that sense Jordan's experiences are more entertaining and that brings you closer to him because you look at these guys and think this seems to be a lot of fun. Well, it doesn't just look that way they really did have a lot of fun. In fact that's really all they could do is have fun and more fun and more on top of that, until it wasn't so much fun anymore. But what they couldn't do was just be. They just couldn't face that. So the challenge is to show that honestly without tipping the scales into judgment and taking you outside of the world these characters and the particular ways that they live their lives which was to obliterate all obstacles, all troubles, all difficulties, by taking more drugs, more money.”
> Well, it doesn't just look that way they really did have a lot of fun. In fact that's really all they could do is have fun and more fun and more on top of that, until it wasn't so much fun anymore. But what they couldn't do was just be. They just couldn't face that.
Blaise Pascal in his Pensées (Thoughts):
> When I have occasionally set myself to consider the different distractions of men, the pains and perils to which they expose themselves at court or in war, whence arise so many quarrels, passions, bold and often bad ventures, etc., I have discovered that all the unhappiness of men arises from one single fact, that they cannot stay quietly in their own chamber. A man who has enough to live on, if he knew how to stay with pleasure at home, would not leave it to go to sea or to besiege a town. A commission in the army would not be bought so dearly, but that it is found insufferable not to budge from the town; and men only seek conversation and entering games, because they cannot remain with pleasure at home. […]
> Whatever condition we picture to ourselves, if we muster all the good things which it is possible to possess, royalty is the finest position in the world. Yet, when we imagine a king attended with every pleasure he can feel, if he be without diversion, and be left to consider and reflect on what he is, this feeble happiness will not sustain him; he will necessarily fall into forebodings of dangers, of revolutions which may happen, and, finally, of death and inevitable disease; so that if he be without what is called diversion, he is unhappy, and more unhappy than the least of his subjects who plays and diverts himself. […]
> To endure oneself may be the hardest task in the universe. You cannot hire a wise man or any other intellect to solve it for you. There's no writ of inquest or calling of witness to provide answers. No servant or disciple can dress the wound. You dress it yourself or continue bleeding for all to see.
I don't think it's exactly "bad guy looks cool and popular." Some people simply identify with villains in fiction. They see nothing wrong with what normal people see as villainous behavior. Without society's law and order, and/or with wealth/power of their own, they would themselves behave just as villainous.
I'm convinced that a lot of people--probably even some of my own neighbors--wear a mask of civility only because we live in a society and have rules that are enforced. If the opportunity ever arrived and we entered some kind of Mad Max lawlessness, they would instantly start to murder and plunder just like barbarians out of fiction.
>I'm convinced that a lot of people--probably even some of my own neighbors--wear a mask of civility only because we live in a society and have rules that are enforced. If the opportunity ever arrived and we entered some kind of Mad Max lawlessness, they would instantly start to murder and plunder just like barbarians out of fiction.
This is mostly a prepper fantasy that justifies things like buying a bunch of guns and canned beans instead of investing in more difficult things like community building. From the (IMO, naive) POV that human behavior is strictly selfish, it would rarely occurs that this kind of behavior would be beneficial to an individual's self-interest. Even in the worst-case, entirely imaginary SHTF complete destruction of society scenario, sociable behavior is more beneficial than any kind of anti-social Wasteland Raider behavior.
Maybe some aberrant individuals, but they would quickly fail without community support.
That preppers and the "tough on crime" set overlap is really curious to me, since in the first you have an acknowledgment that circumstances shape behavior utterly, and in the second you have people really, really eager to punish or deter on an individual level, rather than shape behavior by changing systems.
Lack of punishment is in itself an enviromental factor. I'm sure those people would love to hand out punishment themselves in non apocalyptic scenarios, but the law doesn't let them.
It's okay for art to explore immoral topics, but it's generally not okay for creators and commentators to go, "Come to your own conclusions, wink wink." Have the respect for your viewers, and for your society, to be upfront about how your art is fraught; to say that you don't like the message or implications even if you felt compelled to explore some dark aspect of reality or society or psychology. Or, have the courage to say that you don't think it is fraught. But it's definitely irresponsible to unleash something transgressive on society and then try to wash your hands of it.
Over the last 10 minutes of Wall Street, the main character gets arrested, breaks down crying, gets punched in the face, and then goes to jail. The last scene has his father (driving the MC to jail) turn almost literally to the camera and tell the viewer which precise moral value he's being punished for not upholding. I don't know how much more embodied in the art the values could be.
The problem is that you have to include people's self-justifications to tell a meaningful story. If Gordon Gekko were an uncharismatic sleazeball who tells everyone "I'm greedy because the misery of others pleases me, haha!", the film wouldn't work as a criticism of Wall Street, because real Wall Street tycoons are usually charismatic and don't say such things in public.
>his father (driving the MC to jail) turn almost literally to the camera and tell the viewer which precise moral value he's being punished for not upholding.
Yes, and there's the scene with Hal Holbrook, I think he lectures Bud Fox just before or after he's arrested? Holbrook made a career of playing moral authority figures.
I think the seductive appeal of Gordon Gekko is meant to illustrate something fundamental about the human condition. We are all susceptible to temptation, whether it involves pleasure, money, status, or power. Success doesn't necessarily satisfy desire, if anything, it intensifies it. Can you eat just one potato chip? Would you return a found wallet full of cash? If you made a million dollars, would that be enough? Gekko is an example of an ordinary human predicament: the difficulty of knowing when we have enough, and the ease with which we rationalize getting more.
---
On another note, it's too late to edit my earlier post in this topic.
"delivered in 1986 at The speaker? Ivan Boesky"
should be
"delivered in 1986 at what is now the Haas School of Business of the University
of California at Berkeley. The speaker? Ivan Boesky"
The erroneous question mark is in the PDF, but I inadvertently omitted the location clause. Carelessness is another aspect of the human condition.
> I think the seductive appeal of Gordon Gekko is meant to illustrate something fundamental about the human condition. We are all susceptible to temptation, whether it involves pleasure, money, status, or power.
Aleksandr Solzhenitsyn in The Gulag Archipelago:
> The line separating good and evil passes not through states, nor between classes, nor between political parties either—but right through every human heart—and through all human hearts. This line shifts. Inside us, it oscillates with the years. And even within hearts overwhelmed by evil, one small bridgehead of good is retained.
He’s just a much more interesting character than Charlie Sheen’s. Sheen is playing a kind of boring up-and-comer type character who doesn’t have much more to say apart from “gee I don’t know this insider trading and corruption stuff might be wrong”. Gordon Gekko is a charismatic and successful villain who has an ideology and set of values that he created himself, like the Neitzschean Ubermensch - the audience doesn’t agree with these values but he articulates them well, which makes him more intriguing.
1) Michael Douglas is extremely attractive and charismatic, so people like him even if they're not supposed to. Gekko seduces the viewer to the dark side like he seduced Bud Fox.
2) The movie never shows Gekko in jail, so you never see the true consequences.
There's a disturbing number of people who watch movies like RoboCop and Starship Troopers and don't realize they are satire.
I have a running joke with my closest friends that we are in a post-satire world because real news today is frequently indistinguishable from satire from 10-20 years ago. Sometimes The Onion headlines just bleed into the monotony of the news cycle, but it's not because they are any less satirical.
Do you remember the context of that speech? He was presenting a takeover offer to the shareholders of a poorly run company with a bunch of useless execs with no skin in the game. He may be the villain of the movie, but not of that scene. https://www.youtube.com/watch?v=OHnZi87272U
He's still the villain. He sounds perfectly reasonable. His criticisms of Teldar paper are plausible. He makes a compelling case for greed, but by definition, greed is excessive, it cannot be good.
His apparent reasonableness obscures the fact that he's appealing to the rapacious or covetous nature of the shareholders. He wants to override any moral objection to the fact that he's buying the company, in part, to strip the overfunded employee pensions, and by accepting his offer, shareholders get a cut. (IIRC, it's been decades since I saw the movie.)
What is the moral argument against this? What is the "rapacious and covetous" nature of the shareholders? Pensions are not 401Ks. If there is money left after benefits are paid out, that is the property of the company.
The fact that you see pension savings as the property of the company seems "greedy" to me. I'm not criticizing you. It's technically true in at least some companies. Similarly, the Social Security Trust Fund is the property of the US Government, not the future beneficiaries.
The moral failure is treating a retirement fund, and the people whose livelihoods depend on it, primarily as an opportunity for personal enrichment. Pension assets do not belong to the company in the ordinary sense. They are held in trust for the benefit of employees and retirees. The employer generally cannot withdraw funds while the plan is operating.
Wall Street was released in 1987, and the law regarding pensions has changed since then, in part to address employers reverting pension assets. As I understand it, there is a now a 50% excise tax on reversions, which are only allowed in specific circumstances. I imagine this tax is intended to discourage reversions.
Personally, I don't understand why any of the money I put away for retirement belongs to anyone but me. Usually such funds are managed by finance companies, not the employer, and the finance companies are already getting their cut, any lucky excess should come to me.
(The substance of the issue with overfunded pensions is itself a complicated separate topic, which I don't mean to oversimplify.)
It's crazy how this conversation is a microcosm of the contemporary economy.
Can I add another wrinkle? Wealthy Gekko is obviously the villain, trying to raid pensions to expand his own coffers. Now, what if the pension raid is the cratering of index funds (and the financial contagion that follows)? What if the beneficiary isn't a rich financier, but a generation of workers who finally see asset prices plummet enough to allow them to afford homes, cars, etc.?
Seeing the parallels to our current (or coming) moment, I wonder how others read it.
Not sure why you think a market crash will help housing affordability, much less cars and "etc", and do so enough to overtake the proportionate squeeze on jobs, income, and credit availability. The "pension raid" is decried because a small rich cabal is seen as using it to cash out on inflated valuations before the subsequent correction, and basically everyone whose retirement plan isn't "an early grave" pays into it equally.
The overfunding isn't separate. It's central to the entire thing. If a company owes $5000 a month to its employees, but it has enough to pay them $6000 a month, that money does not go to the employee. It is called a "defined benefit" for a reason. Also the money is not put there by the employees. It is put away by the company. Pensions are not 401Ks.
And yet, those useless execs are better for the company and for employees then him. Much better.
Villans usually see themselves as heroes and everyone else as either stupid or sucker. That does not mean I have to adopt villans framing just because he looks charizmatic.
I had two stints at a hedge fund, one a hedge fund supplier.
The fake self promotional bullshit is so tiring. I quit as a result of this. It's the same as big tech, not any different.
Jane Street SUPPOSEDLY follows a flat hierarchy which has less of these games. I'm not sure how true it is.
The way I think about it: you hire people who are literally self driven and then you constrain them for no reason just to make other people feel in control.
Or maybe I'm just not a good employee. My first job ever told me I'm a horrible employee.
"The same factors that allow leadership to
manifest itself through performance and
teamwork also allow it to promote goals
that lack a moral, ethical, legal, profitable,
or even rational basis."
Thank you for sharing, it is a really interesting read. It expands on the different approaches that try to explain individuals' behaviors in a group. It is always good when there is some variety on HN and we get a bit of social sciences !
The thesis is predicated on a framing that makes no sense.
Gordon Gekko did not influence Wall Street. Capitalism’s functional stages are a product of conventional strategies and the predictable capture of political power by financial power.
Wall Street’s current form was articulated in volumes I and III of “Capital” by Karl Marx. That profit diverges from value, competition leads to consolidation, speculation generates profits which are derived from unrealized market growth which has to continually borrow against itself and uses as its final bank the stability of a coercive state (which it eventually depletes)
(2016), from the New York Fed, back during the Obama administration. Reading this, my first thought was amazement that this came out under Trump. It didn't.
This paper is mostly about risk associated with debt. That's the Fed's job, after all. The current AI bubble is more on the equity side, although, when it pops, we'll see who's been leveraging their equity positions with debt. Historically, up until the 1980s. corporate debt was supposed to be low-risk. If a company went bust, that usually took down the top executives, who were unlikely to get good jobs ever again.
As a result, the bond market was boring. Not much trading. Buy and hold.
Then came "high yield bonds" - debt instruments with high returns but a significant
risk. The concept was that a broad portfolio of high yield bonds became, statistically, a low-risk loan. Risk management and the Black-Sholes model became a major part of Wall Street activity. That's the background of the paper. The audience to which that paper is addressed knows that, so they only hint at it.
This tends to break down when there's some across the board change. The 2008 US housing crisis is the big modern example. Housing prices went down nationally. The assumption of many Wall Street risk management models was that the risk of independent debt instruments was largely uncorrelated. Sometimes, it's not. The Big Short (2015) is the movie version of this, and it explains all this in an entertaining way. (That's quite an achievement for Hollywood - making an entertaining movie about mortgage risk correlation. It's not about bad people. It's about bad risk models.)
That's the underlying basis of the culture problem. Once investors start accepting that some debt instruments will routinely go bust, perverse incentives appear. Then you get Milken, Boesky, LTCM, and Enron. (Not Madoff; Madoff was a straight Ponzi scheme.) The paper tries to tie this to financial culture.
That's not wrong. But it's not the basis of "postmodern capitalism".
All this is to some extent a result of tax policy. Interest received is taxed much more favorably than stock dividends. That encourages debt financing, equity to debt conversion, high-risk lending, and leveraged buyouts. ("Private equity" is mostly leveraged buyouts. Usually the private buyer doesn't have the funds for an all-cash deal.) The line between debt and equity has been blurred. Both are ways to pay for money, but with different tax treatment. There are instruments such as convertible bonds which combine aspects of debt and equity. This effect is so strong that the number of publicly traded companies in the US is down, while the number of tradable financial instruments is way up.
So, the paper is incomplete in that it fails to identify how tax policy increased Wall Street's appetite for risk.
> Once investors start accepting that some debt instruments will routinely go bust
Debt always carries a default risk. This is a fact and has since the beginning of time. I don't see how anything fundamentally changes in the 80s.
You are wrong about the tax treatment of dividends vs interest received. In fact, dividends have the superior tax treatment to investors because of the qualified dividend rule. What you are looking for is the tax shield effect at the level of the company. Interest is deducted from taxable income, so if you have a company with no leverage earning $5 million a year in pre-tax profit, you pay $2 million in tax, with $3 million left to distribute. If the company takes on debt with $2.5 million in interest, now taxable income is $2.5 million with $1.5 left over after tax. This means now you have income distributable to investors (debt and equity) of $4 million vs the $3 million unlevered.
> "The point is, ladies and gentleman, that greed, for lack of a better word, is good." ... few people know that these words are based on an actual commencement speech delivered in 1986 at The speaker? Ivan Boesky, who would be convicted just eighteen months later in an insider trading scandal.
I did not know this! Thank you for posting!
> "The point is, ladies and gentleman, that greed, for lack of a better word, is good."
The whole paragraph from where that line is extracted:
> Teldar Paper, Mr. Cromwell, Teldar Paper has 33 different vice presidents each earning over 200 thousand dollars a year. Now, I have spent the last two months analyzing what all these guys do, and I still can't figure it out. One thing I do know is that our paper company lost 110 million dollars last year, and I'll bet that half of that was spent in all the paperwork going back and forth between all these vice presidents. [some chuckles from audience] The new law of evolution in corporate America seems to be survival of the unfittest. Well, in my book you either do it right or you get eliminated. In the last seven deals that I've been involved with, there were 2.5 million stockholders who have made a pretax profit of 12 billion dollars. [applause] Thank you. I am not a destroyer of companies. I am a liberator of them! The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA. Thank you very much.
* https://www.imdb.com/title/tt0094291/quotes/?item=qt0393936
The text of the larger context of that paragraph is in the above link, or you can watch the entire scene:
* https://www.youtube.com/watch?v=OHnZi87272U
Further interesting facts gleaned from wikipedia;
Boesky was born to a Jewish family in Detroit. His family owned several delicatessens and taverns in the city. Although he lacked an undergraduate degree, he was admitted to Detroit College of Law (now Michigan State University College of Law) and graduated in 1965. In the 1980s, Boesky served as an adjunct professor at Columbia University's Graduate School of Business and at New York University's Graduate School of Business.
Time magazine ran a December 1, 1986, cover story about his "scam," dubbing him "Ivan the Terrible."[11]
Per a plea bargain, he received a prison sentence of 3+1⁄2 years and was fined US$100 million. Although he was released after serving only 20 months, he was permanently prohibited from working with securities. He served his sentence at Lompoc Federal Prison Camp near Vandenberg Air Force Base in California.
Boesky smoked Marlboro cigarettes and lived till 87 yrs.
Boesky was also featured in Titans The Rise of Wall Street on Amazon Prime
Thanks for the much needed context
[flagged]
If it had said ”a working class family”, would you have been offended?
The whole character and his role in pop culture I find very frustrating.
The guy is the antagonist in the movie so you're not supposed to like him and he's written that way. He's a strawman and his whole speech is how the real version of him would sound filtered through the ears of someone who disagreed with him.
So you end up with people holding him up as an example that disagree and agree with him but the both of those groups are choosing the sides of a caricature that doesn't understand the point he's trying to make. It's weird.
It's the problem with most Oliver Stone movies, Scorsese movies, and many other directors: the premise of the film requires a charismatic antihero, and therefore the "bad guy" becomes cool and popular.
The directors always try to avoid this criticism by saying, "Well he goes to jail in the end," but I think it's a bit of a cop out.
I tend to agree with the idea that art should try to embody some moral values, which goes against a lot of contemporary thoughts on aesthetics. But I think it’s a basic fact that people look toward fictional characters as role models, directly or indirectly. Avoiding that responsibility is not good.
> I think it’s a basic fact that people look toward fictional characters as role models
I think it's closer to "monkey see, monkey do".
After the Fast and The Furious movies, young men would street race home from the movie.
After watching the movie The Program, young men laid down in the street at night hoping not to get hit by traffic (copying the risky stunt the characters in the movie did).
The art simply shows what is, not what should be.
The Sopranos was interesting because it showed a mob boss doing the typical mob boss things (dodging FBI surveillance, dealing with rival crime families and street thugs, organizing new business ventures, burying evidence deep in the woods / dumping in the river). But it also showed a man with momma issues, with panic attacks, processing (well mostly rejecting) therapy, a wife who spends too much, a son as dumb as a box of rocks, etc. It wasn't the broad morality of western societies, but it was approachable because the character was eminently human.
Similarly, Dexter was a serial murderer, but he had "a code" (to only murder other serial murderers). His code doesn't necessarily match up with the morals of you or I, but like any fiction, it allows you to suspect your disbelief and inhabit the moral choices / predicaments of the character for a few minutes / hours.
The godfather was interesting coz it apparently inspired the italian mafia to act less trashy.
they aspired to appear more civilized after seeing how they were portrayed on film - wearing tailored suits and swearing less I guess.
It isn't the effect I would have expected.
s/suspect/suspend/
> The directors always try to avoid this criticism by saying, "Well he goes to jail in the end," but I think it's a bit of a cop out
I don’t know which directors you’re referring to, but I doubt you receieved such a simplistic response from Scorcese. Worth reading him in his own words on this, below is what he said regarding Jordan Belfort’s character in The Wolf of Wall Street,
“That's something that I've always been attracted to and is interesting to me. Someone like Jordan or Jake Lamotta or Tommy, Joe Pesci’s character in Goodfellas, and people say well that type of person that sort but… I guess what that means is that they try to distance themselves from them. It's someone else it's not me but in actuality I feel it's not someone else, it's us. It's you and me and maybe if we'd been born under different circumstances, maybe we would have wound up making the same, exactly the same mistakes and choices and doing exactly the same things. I really think … when people say “that kind,” it’s not a matter of equalizing everyone and saying we're all responsible, I think it's a matter of facing and recognizing and acknowledging that part of us which is a part of our common humanity. And we have to deal with it.”
“He [Jordan Belfort] thought that he could bypass morality or surpass morality with a combination of money and drugs. I don't know maybe he still does, I really don't know. There's another way of answering the question; he was different from Madoff and Skilling in that they weren't crashing helicopters or throwing little people (or maybe they were but if they did they kept it pretty quiet) but in that sense Jordan's experiences are more entertaining and that brings you closer to him because you look at these guys and think this seems to be a lot of fun. Well, it doesn't just look that way they really did have a lot of fun. In fact that's really all they could do is have fun and more fun and more on top of that, until it wasn't so much fun anymore. But what they couldn't do was just be. They just couldn't face that. So the challenge is to show that honestly without tipping the scales into judgment and taking you outside of the world these characters and the particular ways that they live their lives which was to obliterate all obstacles, all troubles, all difficulties, by taking more drugs, more money.”
https://youtu.be/kTCyZoaORao
> Well, it doesn't just look that way they really did have a lot of fun. In fact that's really all they could do is have fun and more fun and more on top of that, until it wasn't so much fun anymore. But what they couldn't do was just be. They just couldn't face that.
Blaise Pascal in his Pensées (Thoughts):
> When I have occasionally set myself to consider the different distractions of men, the pains and perils to which they expose themselves at court or in war, whence arise so many quarrels, passions, bold and often bad ventures, etc., I have discovered that all the unhappiness of men arises from one single fact, that they cannot stay quietly in their own chamber. A man who has enough to live on, if he knew how to stay with pleasure at home, would not leave it to go to sea or to besiege a town. A commission in the army would not be bought so dearly, but that it is found insufferable not to budge from the town; and men only seek conversation and entering games, because they cannot remain with pleasure at home. […]
> Whatever condition we picture to ourselves, if we muster all the good things which it is possible to possess, royalty is the finest position in the world. Yet, when we imagine a king attended with every pleasure he can feel, if he be without diversion, and be left to consider and reflect on what he is, this feeble happiness will not sustain him; he will necessarily fall into forebodings of dangers, of revolutions which may happen, and, finally, of death and inevitable disease; so that if he be without what is called diversion, he is unhappy, and more unhappy than the least of his subjects who plays and diverts himself. […]
* https://www.gutenberg.org/files/18269/18269-h/18269-h.htm § 139
* https://en.wikipedia.org/wiki/Pensées
And perhaps:
> To endure oneself may be the hardest task in the universe. You cannot hire a wise man or any other intellect to solve it for you. There's no writ of inquest or calling of witness to provide answers. No servant or disciple can dress the wound. You dress it yourself or continue bleeding for all to see.
* Frank Herbert, Dune Messiah
I don't think it's exactly "bad guy looks cool and popular." Some people simply identify with villains in fiction. They see nothing wrong with what normal people see as villainous behavior. Without society's law and order, and/or with wealth/power of their own, they would themselves behave just as villainous.
I'm convinced that a lot of people--probably even some of my own neighbors--wear a mask of civility only because we live in a society and have rules that are enforced. If the opportunity ever arrived and we entered some kind of Mad Max lawlessness, they would instantly start to murder and plunder just like barbarians out of fiction.
>I'm convinced that a lot of people--probably even some of my own neighbors--wear a mask of civility only because we live in a society and have rules that are enforced. If the opportunity ever arrived and we entered some kind of Mad Max lawlessness, they would instantly start to murder and plunder just like barbarians out of fiction.
This is mostly a prepper fantasy that justifies things like buying a bunch of guns and canned beans instead of investing in more difficult things like community building. From the (IMO, naive) POV that human behavior is strictly selfish, it would rarely occurs that this kind of behavior would be beneficial to an individual's self-interest. Even in the worst-case, entirely imaginary SHTF complete destruction of society scenario, sociable behavior is more beneficial than any kind of anti-social Wasteland Raider behavior.
Maybe some aberrant individuals, but they would quickly fail without community support.
That preppers and the "tough on crime" set overlap is really curious to me, since in the first you have an acknowledgment that circumstances shape behavior utterly, and in the second you have people really, really eager to punish or deter on an individual level, rather than shape behavior by changing systems.
Lack of punishment is in itself an enviromental factor. I'm sure those people would love to hand out punishment themselves in non apocalyptic scenarios, but the law doesn't let them.
Where are we placing the responsibility?
It's okay for art to explore immoral topics, but it's generally not okay for creators and commentators to go, "Come to your own conclusions, wink wink." Have the respect for your viewers, and for your society, to be upfront about how your art is fraught; to say that you don't like the message or implications even if you felt compelled to explore some dark aspect of reality or society or psychology. Or, have the courage to say that you don't think it is fraught. But it's definitely irresponsible to unleash something transgressive on society and then try to wash your hands of it.
Over the last 10 minutes of Wall Street, the main character gets arrested, breaks down crying, gets punched in the face, and then goes to jail. The last scene has his father (driving the MC to jail) turn almost literally to the camera and tell the viewer which precise moral value he's being punished for not upholding. I don't know how much more embodied in the art the values could be.
The problem is that you have to include people's self-justifications to tell a meaningful story. If Gordon Gekko were an uncharismatic sleazeball who tells everyone "I'm greedy because the misery of others pleases me, haha!", the film wouldn't work as a criticism of Wall Street, because real Wall Street tycoons are usually charismatic and don't say such things in public.
>his father (driving the MC to jail) turn almost literally to the camera and tell the viewer which precise moral value he's being punished for not upholding.
Yes, and there's the scene with Hal Holbrook, I think he lectures Bud Fox just before or after he's arrested? Holbrook made a career of playing moral authority figures.
I think the seductive appeal of Gordon Gekko is meant to illustrate something fundamental about the human condition. We are all susceptible to temptation, whether it involves pleasure, money, status, or power. Success doesn't necessarily satisfy desire, if anything, it intensifies it. Can you eat just one potato chip? Would you return a found wallet full of cash? If you made a million dollars, would that be enough? Gekko is an example of an ordinary human predicament: the difficulty of knowing when we have enough, and the ease with which we rationalize getting more.
---
On another note, it's too late to edit my earlier post in this topic.
"delivered in 1986 at The speaker? Ivan Boesky"
should be
"delivered in 1986 at what is now the Haas School of Business of the University of California at Berkeley. The speaker? Ivan Boesky"
The erroneous question mark is in the PDF, but I inadvertently omitted the location clause. Carelessness is another aspect of the human condition.
> I think the seductive appeal of Gordon Gekko is meant to illustrate something fundamental about the human condition. We are all susceptible to temptation, whether it involves pleasure, money, status, or power.
Aleksandr Solzhenitsyn in The Gulag Archipelago:
> The line separating good and evil passes not through states, nor between classes, nor between political parties either—but right through every human heart—and through all human hearts. This line shifts. Inside us, it oscillates with the years. And even within hearts overwhelmed by evil, one small bridgehead of good is retained.
* https://www.goodreads.com/quotes/450864-the-line-separating-...
Thomas Aquinas, echoing earlier philosophers, wrote that money, power, pleasure, and fame/glory/honour were the main idols in this life:
* https://www.newadvent.org/summa/2002.htm
They're not bad in themselves, but they should not be your 'highest good'.
was going to say, Hollywood knows exactly what it's doing with these "bad guys"
He’s just a much more interesting character than Charlie Sheen’s. Sheen is playing a kind of boring up-and-comer type character who doesn’t have much more to say apart from “gee I don’t know this insider trading and corruption stuff might be wrong”. Gordon Gekko is a charismatic and successful villain who has an ideology and set of values that he created himself, like the Neitzschean Ubermensch - the audience doesn’t agree with these values but he articulates them well, which makes him more intriguing.
But is it the people who misunderstand the movie, or is it the movie which fails to make the point you think it should make?
It is a classical hollywood trope to preset a “bad guy” protagonist as cool, charming, and resourceful and with a glamorous life.
Hollywood know how to make you like a character and how to make you dislike one.
Two problems:
1) Michael Douglas is extremely attractive and charismatic, so people like him even if they're not supposed to. Gekko seduces the viewer to the dark side like he seduced Bud Fox.
2) The movie never shows Gekko in jail, so you never see the true consequences.
Prison sentences were so short back then, plus parole, that it was arguably worth it. it worked for Boeseky, Milikin and others.
It only worked for Milken because he had so much money as to be bulletproof and could buy his reputation back.
There's a disturbing number of people who watch movies like RoboCop and Starship Troopers and don't realize they are satire.
I have a running joke with my closest friends that we are in a post-satire world because real news today is frequently indistinguishable from satire from 10-20 years ago. Sometimes The Onion headlines just bleed into the monotony of the news cycle, but it's not because they are any less satirical.
Do you remember the context of that speech? He was presenting a takeover offer to the shareholders of a poorly run company with a bunch of useless execs with no skin in the game. He may be the villain of the movie, but not of that scene. https://www.youtube.com/watch?v=OHnZi87272U
He's still the villain. He sounds perfectly reasonable. His criticisms of Teldar paper are plausible. He makes a compelling case for greed, but by definition, greed is excessive, it cannot be good.
His apparent reasonableness obscures the fact that he's appealing to the rapacious or covetous nature of the shareholders. He wants to override any moral objection to the fact that he's buying the company, in part, to strip the overfunded employee pensions, and by accepting his offer, shareholders get a cut. (IIRC, it's been decades since I saw the movie.)
What is the moral argument against this? What is the "rapacious and covetous" nature of the shareholders? Pensions are not 401Ks. If there is money left after benefits are paid out, that is the property of the company.
The fact that you see pension savings as the property of the company seems "greedy" to me. I'm not criticizing you. It's technically true in at least some companies. Similarly, the Social Security Trust Fund is the property of the US Government, not the future beneficiaries.
The moral failure is treating a retirement fund, and the people whose livelihoods depend on it, primarily as an opportunity for personal enrichment. Pension assets do not belong to the company in the ordinary sense. They are held in trust for the benefit of employees and retirees. The employer generally cannot withdraw funds while the plan is operating.
Wall Street was released in 1987, and the law regarding pensions has changed since then, in part to address employers reverting pension assets. As I understand it, there is a now a 50% excise tax on reversions, which are only allowed in specific circumstances. I imagine this tax is intended to discourage reversions.
Personally, I don't understand why any of the money I put away for retirement belongs to anyone but me. Usually such funds are managed by finance companies, not the employer, and the finance companies are already getting their cut, any lucky excess should come to me.
(The substance of the issue with overfunded pensions is itself a complicated separate topic, which I don't mean to oversimplify.)
It's crazy how this conversation is a microcosm of the contemporary economy.
Can I add another wrinkle? Wealthy Gekko is obviously the villain, trying to raid pensions to expand his own coffers. Now, what if the pension raid is the cratering of index funds (and the financial contagion that follows)? What if the beneficiary isn't a rich financier, but a generation of workers who finally see asset prices plummet enough to allow them to afford homes, cars, etc.?
Seeing the parallels to our current (or coming) moment, I wonder how others read it.
Not sure why you think a market crash will help housing affordability, much less cars and "etc", and do so enough to overtake the proportionate squeeze on jobs, income, and credit availability. The "pension raid" is decried because a small rich cabal is seen as using it to cash out on inflated valuations before the subsequent correction, and basically everyone whose retirement plan isn't "an early grave" pays into it equally.
The overfunding isn't separate. It's central to the entire thing. If a company owes $5000 a month to its employees, but it has enough to pay them $6000 a month, that money does not go to the employee. It is called a "defined benefit" for a reason. Also the money is not put there by the employees. It is put away by the company. Pensions are not 401Ks.
And yet, those useless execs are better for the company and for employees then him. Much better.
Villans usually see themselves as heroes and everyone else as either stupid or sucker. That does not mean I have to adopt villans framing just because he looks charizmatic.
Gekko is the lead character and therefore the protagonist. Antagonists are faceless bureaucrats and later his mentee.
The Corleone family is also who viewers identify with in The Godfather.
Contrast with an Eastwood western, where he is the good guy or a guy better than the rest or at least with consistent morals.
I had two stints at a hedge fund, one a hedge fund supplier.
The fake self promotional bullshit is so tiring. I quit as a result of this. It's the same as big tech, not any different.
Jane Street SUPPOSEDLY follows a flat hierarchy which has less of these games. I'm not sure how true it is.
The way I think about it: you hire people who are literally self driven and then you constrain them for no reason just to make other people feel in control.
Or maybe I'm just not a good employee. My first job ever told me I'm a horrible employee.
"The same factors that allow leadership to manifest itself through performance and teamwork also allow it to promote goals that lack a moral, ethical, legal, profitable, or even rational basis."
Thank you for sharing, it is a really interesting read. It expands on the different approaches that try to explain individuals' behaviors in a group. It is always good when there is some variety on HN and we get a bit of social sciences !
The thesis is predicated on a framing that makes no sense.
Gordon Gekko did not influence Wall Street. Capitalism’s functional stages are a product of conventional strategies and the predictable capture of political power by financial power.
Wall Street’s current form was articulated in volumes I and III of “Capital” by Karl Marx. That profit diverges from value, competition leads to consolidation, speculation generates profits which are derived from unrealized market growth which has to continually borrow against itself and uses as its final bank the stability of a coercive state (which it eventually depletes)
(2016), from the New York Fed, back during the Obama administration. Reading this, my first thought was amazement that this came out under Trump. It didn't.
This paper is mostly about risk associated with debt. That's the Fed's job, after all. The current AI bubble is more on the equity side, although, when it pops, we'll see who's been leveraging their equity positions with debt. Historically, up until the 1980s. corporate debt was supposed to be low-risk. If a company went bust, that usually took down the top executives, who were unlikely to get good jobs ever again. As a result, the bond market was boring. Not much trading. Buy and hold.
Then came "high yield bonds" - debt instruments with high returns but a significant risk. The concept was that a broad portfolio of high yield bonds became, statistically, a low-risk loan. Risk management and the Black-Sholes model became a major part of Wall Street activity. That's the background of the paper. The audience to which that paper is addressed knows that, so they only hint at it.
This tends to break down when there's some across the board change. The 2008 US housing crisis is the big modern example. Housing prices went down nationally. The assumption of many Wall Street risk management models was that the risk of independent debt instruments was largely uncorrelated. Sometimes, it's not. The Big Short (2015) is the movie version of this, and it explains all this in an entertaining way. (That's quite an achievement for Hollywood - making an entertaining movie about mortgage risk correlation. It's not about bad people. It's about bad risk models.)
That's the underlying basis of the culture problem. Once investors start accepting that some debt instruments will routinely go bust, perverse incentives appear. Then you get Milken, Boesky, LTCM, and Enron. (Not Madoff; Madoff was a straight Ponzi scheme.) The paper tries to tie this to financial culture. That's not wrong. But it's not the basis of "postmodern capitalism".
All this is to some extent a result of tax policy. Interest received is taxed much more favorably than stock dividends. That encourages debt financing, equity to debt conversion, high-risk lending, and leveraged buyouts. ("Private equity" is mostly leveraged buyouts. Usually the private buyer doesn't have the funds for an all-cash deal.) The line between debt and equity has been blurred. Both are ways to pay for money, but with different tax treatment. There are instruments such as convertible bonds which combine aspects of debt and equity. This effect is so strong that the number of publicly traded companies in the US is down, while the number of tradable financial instruments is way up.
So, the paper is incomplete in that it fails to identify how tax policy increased Wall Street's appetite for risk.
> Once investors start accepting that some debt instruments will routinely go bust
Debt always carries a default risk. This is a fact and has since the beginning of time. I don't see how anything fundamentally changes in the 80s.
You are wrong about the tax treatment of dividends vs interest received. In fact, dividends have the superior tax treatment to investors because of the qualified dividend rule. What you are looking for is the tax shield effect at the level of the company. Interest is deducted from taxable income, so if you have a company with no leverage earning $5 million a year in pre-tax profit, you pay $2 million in tax, with $3 million left to distribute. If the company takes on debt with $2.5 million in interest, now taxable income is $2.5 million with $1.5 left over after tax. This means now you have income distributable to investors (debt and equity) of $4 million vs the $3 million unlevered.
Pay side. Interest paid is a tax-deductible business expense. Dividends paid come out of after-tax profit.