The Ethic of Greed and the Spirit of Capitalism

Washington Post article on the hedge fund holdouts who forced Chrysler into bankruptcy is headlined: “In Chrysler Saga, Hedge Funds Cast As Prime Villain: Firms Say They Were Right to Hold Out”.

I was interested to see what kind of argument the firms would be able to mount for the proposition that their actions were “right,” which I take to be a term connoting something like “ethical” or “morally justified.” It turns out, however, that they mean something rather different:

“Some of the characterizations that were used today to refer to us as speculators or to say we’re looking for a bailout is really unfair,” said one executive who spoke on condition of anonymity because of the sensitivity of the matter. “What we’re looking for is a reasonable payout on the value of the debt . . . more in line with what unions and Fiat were getting.”

George Schultze, the managing member of the hedge fund Schultze Asset Management, a Chrysler bondholder, said, “We are simply seeking to enforce our bargained-for rights under well-settled law.”

They’re not actually saying that what they did was right. Rather, they’re saying that it was selfish but also legal. Which is fair enough. People aren’t allowed to just do any old selfish and greedy thing they like. You can’t break into my house and steal my TV. But the law does afford wide latitude for the impulses of selfishness and greed. So one is within one’s rights, under certain circumstances, to insist on one’s ability to inflict suffering on vast numbers of people in order to make more money for your rich self and your rich clients. But it seems very odd to characterize it as “unfair” to be subjected to moral criticism for one’s conduct.

This, however, is one of the signal properties of our age. It’s one thing to model human activity as driven solely by the relentless pursuit of money. Such models can enlighten various situations. But it’s another thing entirely to actually recommend such a lifestyle as optimal or moral, or to make the claim that any conduct that rationally serves the goal of increased personal wealth is therefore “right” or that to criticize self-interested and socially destructive behavior is “unfair.” I think Obama is to be congratulated for his handling of the situation. He didn’t have the FBI storm in, guns blazing, and take these people’s money. He respects the law. He respects property rights. He’s going to go through the bankruptcy process. But he also didn’t respect the ethic of greed that’s come to dominate American public life. He reserved the notion that some conduct is wrong and worthy of criticism and held out the ideal that selfish people might someday be motivated not only by acquisitiveness but by some kind of shame and a desire to behave—or, at a minimum, be seen as behaving—in a public spirited manner.

Reclaiming the idea that there are ethical issues in life that don’t relate to gay marriage or abortion will be an uphill struggle, but it’s an important one.

http://yglesias.thinkprogress.org/archives/2009/05/the-ethic-of-greed-and-the-spirit-of-capitalism.php

Notice that these investors bought Chrysler stock when it was already in the tank at $0.30 a share, and the company on the ropes. Their rationale was that they would profit even if Chrysler had to sell its assets during liquidation. Not once they entertained or considered the fate of the Chrysler workers.

The enemies of the workers is, was, and will continue to be capitalism.

"Its only business" It is used when people are laid off, when wages are cut, when bad things happen to people.

"Its only business"

But think about it, what is it really saying. And when it is said. When a bad thing happens to someone for business reasons (usually profit), because it was done for profit it no longer matters that it was bad.

Literally it is saying that although bad, something being business trumps morality.

This is a rational, a catch phrase, when a person thinks of suffering a business decision may have caused, they feel bad, but by pulling up that phrase, without understanding what they say, they can wash away the bad feelings and feel justified. Because the phrase and the sentiment in large parts of society is agreed with, it is what we are trained to think, and so they feel they are not morally wrong when viewed by society.

But what they are really saying is making money is more important then the suffering of people.

This is not an indictment of the entire profit motive, it can add to society, but allowed to be the main guiding factor, it can be cruel without thought or feeling.