We are all aware of the dramatic nosedive of the stock markets, which has eroded trillions of dollars from the value of US and foreign corporations, and is causing economic stress globally. A CNBC TV series suggests that a major cause for this situation, at least in this country, is American Greed. Others blame our government for loosening regulations and ignoring their role of oversight, as CEOs of now bankrupt Wall Street firms walked away with the hundreds of millions of dollars bankrolled by U.S. taxpayers. Listen to this excerpt from my lecture on quality improvement in September 2007 (4:09): Unjust Rewards: Compensation for Failure.
Is greed the only negative core value (of the five: lust, anger, greed, attachment/possessiveness, arrogance) that caused this crisis?
Can you discuss, with examples, how all five negative core values have played a role in creating this crisis?
In the search for blame, some say greed and some say deregulation. Both are right. The financial collapse of Wall Street is the fiscal consequence of the economic philosophy that now governs America — that markets are always good and government is always bad. But it is also the moral consequence of greed, where private profit prevails over the concept of the common good. The American economy is often rooted in unbridled materialism, a culture that continues to extol greed, a false standard of values that puts short-term profits over societal health, and a distorted calculus that measures human worth by personal income instead of character, integrity, and generosity.
http://www.huffingtonpost.com/jim-wallis/greed-in-the-economy-its_b_127428.html
“human worth by personal income instead of character, integrity, and generosity”. I thought this was interesting.
Greed is defined as: An excessive desire to acquire or possess more than what one needs or deserves, especially with respect to material wealth
Just looking at the “possess more than what one needs” are we not all greedy.
-Do we need as many sets of clothes as we have
-Do our houses/apartments have to be as large as they are
I guess what I am saying is what really are our needs and not our “WANTS”
You are so right Roy. We all are guilty of being greedy to an extent. This is what society has become. Everyone wanting the newest clothes, the newest cell phone, etc. Is all this really necessary? Most of the time it is a situation where people are trying to keep up with their neighbor or friends. Always wanting what they have. This greed in us all is partially to blame for the economic crisis. We as citizens and the government turned a blind eye for a while on what was going on. Mainly, I think, because for the most part society is selfish and it wasn’t really affecting them personally at the time. When it started affecting more and more people, especially thier wallets, then it became news and became an issue. When the stock market was booming and we had intersts in these wall street companies through stocks, mutual funds, etc. did anyone care what salaries the CEO’s were making? It wasn’t until the company stocks were doing bad making the stockmarket as a whole do bad, did everyone start to take notice and complain.
You bring up a great point, Roy. People make their decisions based their wants not their needs. They don’t have to take a vacation when they know they our behind on their monthly rent. They put their wants before their needs. They have forgotten the principle of taking care of home first and ensuring the needs of the home are satisfied and fulfilled.
Yes, Margaux, as you say, “People make their decisions based on their wants not their needs.”
Another way to put: “We are all bundles of desire – motivated by Four Levels of Desire…the Third Principle of Purposeful Action.”
PC
I agree with you Roy, this is a valid point.
Greed, or at least self-interest, is always present to some degree in the economy. Why has greed suddenly produced so much harm, and why only in one sector of the economy?
Firms are profit seekers, but they will seek it where the institutional incentives signal profit is available. In a free market, firms profit by satisfying their customers, investing wisely, and making prudent loans. Regulations, policies, and political rhetoric can change those incentives.
When the law either poorly defines the rules of the game or tries to override them through regulation, the invisible hand that makes self-interested behavior mutually beneficial may become more of a fist. In such cases, “greed” can lead to problems, not caused by greed but by the institutional context channeling self-interest in socially unproductive ways. To call the housing and credit crisis a failure of the free market or the product of unregulated greed is to overlook the myriad government regulations, policies, and political pronouncements that have both reduced the freedom of this market and led self-interested actors to produce disastrous consequences, often unintentionally.
http://www.csmonitor.com/2008/1022/p09s01-coop.html
Mirek,its only money that makes people loose their moral values and integrity.Once people loose their intergity,they loose their senses.What happened at the present recession is mis management of finances,lack of professional ethics and lack of morality.Its a big gambling game.As I have mentioned before its the poor peorple who are becoming poorer and the rich people are still becoming more and more wealthier.
Chandrika, to tell that Money makes people lose their character and moral might be a string statement, It’s after all money that all finally work fro for their daily bread. It’s important to know where your vision is and to work towards it. I agree that without money everything is nothing, but it depends on oneself too.
The economic collapse was bound to happen as corporate America became more and more greedy. “Greed is good” claimed Gorden Gekko (Michael Douglas) in the 1987 memorable movie Wallstreet. What people failed to realize is that the fantasy of corporate America as portrayed in that movie including the mergers and acquisitions, stock manipulation, and insider trading, has become reality. In greed, corporations developed unstable and opportunistic schemes which – although not illegal, were certainly unethical, illegitimate and perhaps even immoral.This economic meltdown of the 21st century was bound to happen as people became progressively greedy. America suffered through one great depression and now this. Karl Marx was wrong in his views about capitalism, but he was correct when he said, “History repeats itself, first as tragedy, second as farce.”
Reference:
http://ethical-business-management.suite101.com/article.cfm/an_economic_crisis_bank_failures
I will go back a few years and use ENRON as an example. It was one of the first companies that started the crisis. Here is a little background about ENRON. Enron was founded in 1985 with the merger of two natural gas pipeline companies. The company grew very fast and was the 6th largest company by revenue at one time. ENRON gave about $6 million dollars towards campaign contributions since 1990. In 1999 the US government passed the Gramm-Leach-Blily Act. Senator Graham pushed the act to get it passed. His wife was recently elected to be on the board of directors at EMRON. This was a form of attachment. This ACT allowed companies to pursue other interest and ENRON got involved with water, fiber optics, newsprint, and telecommunications, corporate lust. When there is limited regulations the envelope will be pushed and riskier activities will happen. ENRON had been using its stock value as collateral to obtain loans, a form of lust. When the stock fell, and it fell fast, upper management sold there stock and would not let the employees sell there shares of stock in their 401Ks. This was a form of greed. “ENRON’s accounting firm, Arthur Anderson, was accused of shredding documents and complicity in the deception”, a form of anger.
All five of the negative core values played a role in the collapse of ENRON.
http://www.sanders.senate.gov/news/record-print.cfm?id=303188