Greed is Good—Or is it?

Greed is Good—Or is it? "Greed is good" is the often misquoted statement by the character Gordon Gekko played by Michael Douglas in the 1987 film Wall Street. The quote is actually part of a longer quote where Gekko uses greed for "lack of a better term" to describe what he claims drives businesses and individuals to succeed. Merriam-Webster's Dictionary defines greed as "a selfish and excessive desire for more of something (such as money) than is needed." Greed is one of the seven sins assumed to have been created by the Catholic Church. Saint Thomas Aquinas said greed is the denial of things eternal for the sake of worldly goods. It is an obsession for material things that includes never having enough. Psychologists see greed as an irrational emotion. Greedy individuals display negative behaviors such as depression, loss of interest, reduced sense of well-being and aggression. It is also associated with envy. What does greed mean for businesses pursuing profit? Without profits, businesses do not exist. On the other hand, pursuing material goods is what defines greed. Or at least pursuing too many material goods. This compares business to more worthy occupations like teaching or nursing, for which people want to be fairly paid, but are not seen as manifestations of greed. The answer is probably somewhere in between. As with most things in life, there is probably a balance between how much profit is too much. The problem is who makes that decision. In business, greed is often associated with one party taking advantage of another in a way that harms the other party. Bernie Madoff and anyone else engaging in Ponzi schemes to steal money from unsuspecting investors is an easy example of greed. Lisa Kahle-Piasecki, Associate Professor of Business at Heidelberg University, said greedy capitalists were the reason for the formation of labor unions. "German philosopher, Karl Marx thought that capitalists were able to make a profit only through the exploitation of workers, and were, therefore, inherently greedy." Since Marx's time, however, legal changes have occurred protecting workers from what some see as the greed of business owners. "Despite these protections for workers data show that the share of workers represented by a union decreased to 11.3% by the year 2020" Kahle-Piasecki added. Some would say that there is "good greed." Capitalism was built on the idea that producing as much profit as possible is desirable, as long as it does not create loss or harm others. The question of greed comes up when discussing tax rates. President Joe Biden and other liberals like to say that the rich do not pay their "fair share" when defending proposals to raise taxes. A recent Internal Revenue Service study showed that the richest 1% of Americans earned 22% of all their income but paid 42% of all the Federal personal income taxes. The bottom 50% made 10% of the income and paid less than 2% of the total income taxes. Biden and others of his ilk never say how much more they think the rich should be paying to reach this "fair share." The income inequality that exists in the US and other parts of the world is often blamed on corporate greed. In 2021 the average pay of the Standard & Poors 500 CEO was 324 times that of the median employee in those same companies. Corporate greed has been blamed for causing inflation. While prices charged by companies have risen, their costs have also gone up, leading to those increases in consumer prices. Price increases are a result of inflation, not greed. Perry Haan is professor of Marketing at Tiffin University. He can be reached at haanpc@tiffin.edu