Many think that when anyone criticizes the super rich—specifically the multimillionaires and the billionaires—that it stems from nothing more than wealth envy. While that may be true for a few who themselves were unable to attain that feat, for most it is about equity and fairness.
Most remember the speech about greed given by Michael Douglas’ character Gordon Gekko in the 1987 movie Wall Street. It was short, but it was a confirming catalyst that allowed me to see the fraud that is our current economic system.
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. 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. 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.
The essence of that speech was that of a master, a puppeteer, controlling companies and thus the lives of millions via financial transactions that built or created nothing of value. They made money by seeing the economic pieces solely as pawns to play with in a game of wealth extraction. Plutocrats and capitalist apologists can attempt to frame it in a more palatable form, but they cannot remove the stench for those not wearing gas masks.
It is clear, however, that Americans are not greedy to the extent that plutocrats are, and plutocrats prey on that reality in order to gorge themselves. If greed was good and we all suffered from the excesses of it, the ones who would succeed would be the ones capable of making something of value to society, not those who depend on the manipulation of numbers.
When writing my first book, As I See It: Class Warfare the Only Resort to Right Wing Doom, I exposed my economic innocence and quickly learned how a free enterprise system is supposed to work.
When I came to America in 1979 to attend college I had very little knowledge of economics. At 18 I knew nothing about the stock market, taxes, supply, demand, money, or the interactions thereof. As an engineering student economics was not a part of the curriculum either. As an avid news geek, I remember hearing terms like inflation, stagflation, Dow Jones Average, and all these other economic terms. I wanted to learn.
I decided to take an Economics 101 class. The class was an eye opener. It is there that I learned about supply and demand. I remember one of the first questions the professor asked was what would happen to the price of a product if there was a lot of demand for some particular product. In my naivety I said the price of the product would fall since the person or company selling the product would have made enough money to cover expenses and could then afford to lower the price. I just could not help but feel that increasing the price for something that was selling well was ethical. Well I learned fast that the free enterprise system as designed operated differently and that pricing was actually how we maintained a somewhat balance on supply and demand.
If Company “A” has a product, they can increase the price of that product just to the point where its price times its volume less expenses to make the product causes a drop in overall profits for that particular product. A product price that generates a profit will ultimately cause a Company “B”, Company “C”, and so on to start making a similar product and likely price their product lower than Company “A” in order to appeal to some of Company “A”’s customers. Company “A” will be forced to lower their prices to prevent the other companies from taking all their customers for that product.
The above scenario is known as competition and in a free enterprise system free of corruption it is self-balancing, self-regulating, and efficient. In a free enterprise system you have the freedom to create virtually any product or service that you believe a demand would exist for. Demand for what you, an entrepreneur has to offer will determine if your product or service would be profitable and profitability of that product or service will likely determine if others are likely to offer similar product and services to compete with you. This is good for our society all around because competition will keep prices of any product or service more affordable while preventing the concentration of accumulated wealth (excessive profits) in the hands of a few. It is a system that when implemented fairly works for all those who want to produce, create, or be entrepreneurial.
I learned about free enterprise, but was never indoctrinated by what our business schools try to impart on their students. Capitalism is not free enterprise, and Gekko was not an unrealistic character. We’ve come to see that today’s plutocrats create more damage to the world economy than he ever could. They made an extractive, immoral, pilfering system acceptable.
While still going through the process of learning the real economic system beyond the macroeconomics courses I took, I went to see the Eddie Murphy movie Trading Places. While the movie Wall Street was confirming, Trading Places was the movie that opened my eyes to the fraud of a system where those who produce with their labor and intellect were not the beneficiaries of their worth.
Eddie Murphy’s character was a bum on the streets. Two plutocrat brothers made a bet that they could turn an executive into a bum, and a bum into a Wall Street executive. The experiment was successful for the brother who turned Eddie Murphy, the bum, into a stock trading executive.
The movie had a socioeconomic message. But most importantly, it showed how detached the capital markets are from reality. Even though it was just a movie, research shows there is little knowledge of anything substantive needed to be a player in the capital markets. One just needs to be chosen to be a member of the club, and being a member affords one an inordinate amount of control over the lives of millions, thanks to our corporate structure.
The plutocrat brothers in the movie bet one dollar on the experiment and would have destroyed two lives in the process, had Eddie Murphy’s character not exposed the bet. Unfortunately for most Americans, those responsible for discovering the “bets” are willfully asleep at the wheel, and Americans have been paying the price for this for more than 40 years.
No human being has provided enough labor and intellect in our current economy to be worth $100 million, let alone billions of dollars. That hoarding of capital is on the backs of most working people, directly or indirectly
We can do better. We must think outside of the box. But we must begin by recovering the wealth that this system allowed a few to extract from our economy, effectively acting as an economic parasite to most of us.
It will not be easy to get these policies passed, given the number of elected officials on the take. But we must do it.