Spivs get rich. Greed prospers. I'm no expert, but this cannot be right

[marmar]

from the Independent UK:



Paul Vallely: Spivs get rich. Greed prospers. I'm no expert, but this cannot be right

The demise of some of capitalism's wealthiest players might be seen as poetic justice but it does offer a sensible opportunity to rein in the excesses of the investment banking system

Sunday, 21 September 2008



We are all driven, it is said, by greed and fear. Certainly, there's been plenty of both about in the world of finance. In a breathtakingly short space of time, three of the top five investment banks have collapsed – and the world's largest insurance company and the biggest mortgage providers in the US and UK have been nationalised or had to be bailed out by the state – in what amounts to the worst international financial crisis since the Great Depression of 1929. Greed made people buy and fear made them sell.

The nation's blogs and pubs have been lit up this week with Schadenfreude. There have been references to Icarus, The Bonfire of the Vanities and ironic repetitions of Gordon "Greed is Good" Gekko's infamous line from the 1980s' Hollywood movie Wall Street as the red braces gave way to red faces. There was a poetic justice about the bankers' transition from hedge funds to enforced gardening back at their palatial dwellings for those who were not about to be forced to sell the products of their ill-gotten gains.

Capitalism's defenders shrugged at that. Such excesses are the inevitable, if unpalatable, consequence of the system which history has shown to be humanity's most efficient way of creating widespread wealth. Greed is just the most extreme expression of the impulse of self-interest which carries all of us through our daily lives. It is what creates the incentive for people to get up in the morning and go out to work. It is the impulse which makes people take the risks that lead to economic growth. And it has been considered no moral threat in most times and cultures.

So when does self-interest turn into greed? The Greek philosopher Epicurus said that wealth consists not in having great possessions, but in having few wants. It was not a unique insight. Two hundred years earlier, the Buddha had suggested that greed came from incorrectly associating material wealth with happiness. Acquiring stuff, he said, has less impact than we anticipate on our sense of happiness.

The history of human culture shows an ambiguity to wealth. Riches were a gift and blessing in the Proverbs tradition of the Hebrew scriptures, and a reward for hard work; the Jewish prophets, by contrast, were filled with righteous indignation at the rich for growing their wealth by exploiting the poor. Christianity for a thousand years disapproved of demanding interest on a loan, which it called usury until, at the Reformation, Luther decided inequalities were necessary to the functioning of the financial world because differentials create incentives that create wealth. ...........(more)

The complete piece is at: http://www.independent.co.uk/opinion/commentators/paul-vallely-spivs-get-rich-greed-prospers-im-no-expert-but-this-cannot-be-right-936857.html

[Beregond2]

1. The most sensible thing I have read on this topic.