Posts Tagged ‘greed’

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Special mention

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Yesterday in our class on A Tale of Two Depressions, we discussed Robert McElvaine’s notion of “moral economy” (which he introduces in chapter 9 of his book, The Great Depression: America, 1929-1941). The idea is that, during the first Great Depression, Americans were engaged in an intense debate between different moral economies (which McElvaine characterizes as the difference between the “cooperative individualism” of workers and the “acquisitive individualism” of businesspeople).

As I explained to students, all economic theories—for example, neoclassical, Keynesian, and Marxian theories—represent moral economies. And they arrive at very different conclusions concerning the justice or fairness of capitalism. Thus, for example, neoclassical economists argue that everyone gets what they deserve and, through the workings of the invisible hand, the result will be full employment. In contrast, Keynesian economics is based on the proposition that, while everyone may get what they deserve (with the possible exception of coupon-clippers), it’s quite possible that will result in less-then-full-employment equilibrium, which then requires the visible hand of government intervention. Marxian economists propose a third possibility: even if everyone gets what they deserve in markets, in production things are different (because of exploitation)—and the consequence, whether there’s an invisible or visible hand, is inequality and instability. In other words, the three economic theories represent radically different moral economies.

One student then invoked the idea of moral economy and blamed greed for causing the current crisis. I responded by making the distinction between individual greed and economic institutions, which like the different notions of fairness among economic theories leads to quite different solutions: throw the greedy bankers in jail (which of course we haven’t done) or change the economic institutions (which we haven’t done either).

Chris Dillow makes a similar distinction between “greedy bankers” and “overly powerful bankers.” His view is that “the habit of over-emphasizing individuals’ traits and under-emphasizing situational forces” leads us to “to moralize inequality; the rich are rich because they are greedy whilst the poor are poor because they are lazy.”

What this effaces is the fact that inequalities in capitalism are instead the result of inequalities of power – a power which rests in part upon ideology. Moralizing inequality tends to blind us to this fact. It creates the illusion that capitalism would be acceptable if only those at the top were better people, when in fact the faults in capitalism are structural and not due to the flaws of passing individuals.

That’s pretty much the same distinction I was trying to make, although I still want to characterize the two explanations as different moral economies: one is a moral economy of flawed individuals, while the other is a moral economy of flawed institutions.*


*Although I’m willing to admit I’m sympathetic to Dillow’s view for another reason: because he invokes my favorite football club and blames Crystal Palace fans (who greeted Wayne Rooney with chants of “you fat greedy bastard”) for committing the error of “blaming Rooney’s salary upon his personal character rather than upon his situation.”



I went to see Martin Scorsese’s Wolf of Wall Street over the break—and, as readers know, I didn’t much like it.

Still, I can thank my luck stars I didn’t view it with Steve Perlberg in Manhattan’s financial district.

There’s a lot of talk about how Wall Street has “changed” since the financial crisis. Compliance is up, bonuses are down, the holiday parties are boring.

But you wouldn’t necessarily know that from what these guys were cheering at.

When Belfort — a drug addict who later attempts to remain sober — rips up a couch cushion to get to his secret coke stash, there were cheers.

Then, intercut with Popeye eating spinach, Belfort is irrevocably high on Quaaludes (or “ludes,” a muscle relaxer) and dumps coke into his nose to remedy the situation — more cheers.

The worst, though, mild spoiler alert … At one point later in the movie, the feds get Belfort to wear a wire to implicate others at his firm. Meeting with his No. 2, Belfort slides over a piece of paper: “Don’t incriminate yourself. I am wearing a wire.”

And the crowd goes wild. Don’t rat! Stand by your firm!

Bankers: First of all, don’t cheer in a movie. It’s weird. You can laugh, but no cheering. Second, guffawing while Leo attempts to evade federal indictment doesn’t exactly help America’s perception of your societal value.

Maybe Scorcese’s latest will come to play the same role as Oliver Stone’s 1987 film: an obvious critique of “greed is good” to many of us, but a celebration of that same ethos to the real wolves of Wall Street.


Special mention

Kq9dT.AuSt.79 11.12.13: Steve Bell on world leaders taking selfies at the Mandela memorial

What explains the actions of the protesters in Wisconsin—is it greed or grievance?*

I agree with Daniel Little that greed seems to have little to do with it.

One thing I find interesting about the sustained demonstrations and protests in Madison, Wisconsin is the fact that people on the streets do not seem to be chiefly motivated by personal material interests. Rather, the passion and the sustainability of the protests against Governor Walker’s plans seem to derive from an outrage felt by many people in Wisconsin and throughout the country, that the Governor’s effort is really an attempt to reduce people’s rights — in this case, the right to come together as a group of workers to bargain together.

But I do have a problem with the way Little poses a dichotomy between “personal material interests” and outrage over a violation of rights. His view is that there’s a moral economy (such that “the fact of sustained violation of a person’s moral expectations of the society around him or her is a decisive factor in collective mobilization in many historical circumstances), which he contrasts with self-interest.

I think there are three issues that need to be addressed: First, material interests are not the same as self-interest. There can be, and often are, material interests of groups that transcend (or at least different from) the interests of the self (unless, that is, we redefine the self to include interests associated with a group or some other larger entity). Second, material interests should not be reduced, as they often are in rational-choice theory, to financial well-being. Not being oppressed is just as material an improvement in people’s lives as making more money.

Third, and most important for me, material interests and justice are not so easily separated as Little (not to mention many others) seems to presume. Material interests are often perceived through a discourse of justice and injustice, because an individual or group believes they deserve something (whether higher wages or collective-bargaining rights). By the same token, a sense of justice or injustice forms part of a discourse that has material effects in the way people understand and act in the world. That, for me, is the real content of the idea of a moral economy: material interests and senses of justice and injustice form part of a complex, interdependent whole. And that’s as true of a noncapitalist peasant economy as it is of capitalism. Each is a particular moral economy of just and unjust deserts.

So, what motivates the protesters in Wisconsin? It’s the idea that a prevailing moral economy—in which workers have the right to bargain collectively, but also the responsibility to do their jobs and to take into consideration financial exigencies in the state when engaged in collective bargaining—has been violated by the governor and Republican-dominated legislature. That’s what people in Wisconsin and around the country identify with, as it pertains both to public-sector workers in Wisconsin and to what the rest of the country might look like if Walker has his way.

More generally, can we say there’s a moral economy that motivates Americans? Here’s Little’s interpretations of what expectations we hold concerning “how society ought to work”:

Several things seem fairly clear. Americans care about equality of opportunity. We are deeply rankled by the idea that the good opportunities in society are somehow captured by an elite of any sort. Second is the idea of equal treatment of all citizens by the institutions of the state. Teenagers and persons of color rankle at being singled out for special attention by the police. Women rightly seethe at the persistence of institutions in the workplace that continue to treat them differently. Arab Americans rightly resent special scrutiny at airports.  We don’t accept status inequality easily — especially in our own cases.  And third, we are very sensitive about the inviolability of our rights — our right to vote, right to go where we want, right to speak our minds and associate with whomever we want to.

What Americans don’t yet seem to have is a specific moral sensitivity to extreme inequalities of income and wealth. The fact of the accelerating concentration of income at the top doesn’t seem to produce the moral outrage in the US that perhaps it would in France or Germany. And maybe this comes from another element of our moral economy — the idea that inequalities are all right as long as they are fairly earned. But more information about bonuses on Wall Street and the banking industry may begin to erode that tolerance.

I agree with him for the most part. I do think there’s a common sense in the country about equality of opportunity,  equal treatment by the state, and the inviolability of our rights. I also think there’s sensitivity, especially these days (but also throughout U.S. history), about extreme inequalities in the distribution of income. I just don’t think there’s much leadership on that issue and, as a consequence, there’s not a well-developed discourse concerning what to do about it.

A large part of the responsibility for that impasse needs to be placed at the feet of mainstream economists, who mostly ignore inequality—and, when they do acknowledge it, they mostly dismiss it by reference to the just deserts of free markets. In other words, everybody gets what they deserve: some deserve a lot more, and others deserve a lot less.

That’s exactly what the critique of political economy is all about: to show that, on its own terms, the bourgeois moral economy conceals the fundamental injustice of exploitation; and to point in the direction of an alternative moral economy: from each according to their abilities, to each according to their needs.

* The greed-versus-grievance debate was created by neoclassical economist Paul Collier in order to demonstrate that rebels, in intra-state conflicts, were motivated more by individual greed (e.g., over the gains from controlling resources) than they were by grievance (e.g., over class issues). The implication of his work was that peacemakers could ignore grievance or class issues and, instead, focus on freeing-up markets to decrease the returns accruing to monopoly control over resources.