Comments (21)

• Arthur Medina

  Gordon Gekko was on to something alright. However, it would have been preferable if he said "selfishness is good" rather than "greed is good." Life, let alone any kind of human civilization, is impossible without selfishness. And what is greed but misguided selfishness. But Oliver Stone needed a villain for his movie and "greedy capitalists" are easy targets.

  Published: July 20, 2009 1:13 AM

• Greego

  I watched this movie for the first time a few weeks ago and had a very similar impression to Jeffrey. Gekko is still inspiring despite the way he's demonised and the unions are glorified. I wonder what Michael Douglas actually thought of that character and that way of looking at life - he's extremely convincing.

  Arthur: I thought he should've made the point that greed is a constant - but only in a capitalistic system is it a social good. But that's a little long-winded I guess!

  Published: July 20, 2009 4:30 AM

• Artisan

  The movie was allright... one of the best Michael Douglas performance. Certainly better than many other works on the same subject. There's a comedy with Dany de Vito as a mean capitalist buying up firms which is hilarious and as much inspiring though - but I forgot its name.

  Published: July 20, 2009 5:25 AM

• Robert Brager

  Other People's Money

  Published: July 20, 2009 6:31 AM

• T

  There are better pro-capitalism films that Wallstreet...

  Ghostbusters is on. Trading Places is another.

  Published: July 20, 2009 11:01 AM

• Artisan

  Thanks Robert!... and yes, Trading Places of course.

  Published: July 20, 2009 11:39 AM

• Curt Howland

  "History ends with the capitalists on top."

  Only in the long term.

  Individual lives, sadly, are still short-time-horizons. The battle for success over government is today's battle, not just tomorrow's.

  I remember in the TV "Highlander", when Duncan McCloud is commenting on investment: "I always invest long-term. Very long-term."

  Published: July 20, 2009 12:23 PM

• Walt D.

  Greed = Covetousness = Avarice?
  
  In various versions of the "Seven Deadly Sins", these were considered to be same sin. This is interesting - the same politicians who rail against greed espouse a policy that is rooted in covetousness. In many commentaries on the Biblical 10 Commandments, covetousness was considered to be one of the most egregious sins, since it invariably led to the breaking of the other commandments.

  Published: July 20, 2009 2:09 PM

• S Andrews

  When is Atlas Shrugged movie coming out?

  Published: July 20, 2009 2:32 PM

• CJW

  Dear Mr. Tucker,
  
  I enjoyed your recent article on Mises.org, "Capitalism as Drama". I am unfamiliar with the works of Garet Garrett, but your description of his writing along with the passages you quoted have intrigued me, and I intend to add his novels to my reading list as soon as possible.
  
  I would like, however, to offer a different perspective on the movie "Wall Street" - one that I think you will appreciate. This has long been one of my favorite films, and I have watched it many times over. I think, if you were to watch it again, you might find that it has much to offer to fans of Ayn Rand and Austrian economics. Please read on.
  
  Rand proclaimed self-interest to be the highest moral virtue, but only to the extent that it is rational and honest. Swindlers, thieves, and thugs, who pursue their interests at the expense of other people, are the scourge of society. And she held the producers of the world in the highest esteem.
  
  Gordon Gekko is, by his own admission, no producer. "I produce nothing. I own", he says. This in itself is not necessarily a bad thing. Speculators play a vital and beneficial part of any free market. And the famous "Greed is Good" speech is so appealing because much of what he says in that speech is actually true.
  
  The problem with Gordon Gekko is not that he speculates, nor that he's greedy. The problem is that he is also dishonest. He relies on insider trading and stock manipulation to acquire his wealth. As he says, he only bets on "sure things". For all his proselytizing about free markets, he is nothing more than a crook, no different from a used car salesman who rolls back odometers.
  
  The protagonist, Bud Fox, faces a moral dilemma. He is seduced by Gekko's wealth and charisma, and begins to engage in the same fraudulent activity. But he never seems entirely comfortable with what he is becoming. At his heart, he still wants to do something productive. And he sees a great opportunity to do so with Blue Star airlines. He wants to partner with Gekko to invest in this fledgling little airline, modernize it, expand their operations, and lead it to new competitive heights. He even convinces the unions to accept across-the-board wage cuts to make the expansion possible. The unions in this movie are obviously interested in the growth and success of their company, and are willing to make sacrifices for it. But Gekko secretly decides to liquidate the company, betraying everyone involved.
  
  Personally, I think Ayn Rand would have found this movie fascinating. It is not about Gordon Gekko versus the unions. It is about Bud Fox's moral struggle with the temptation of dishonest easy money, versus his ultimate desire to create something worthwhile.
  
  Sprinkled throughout the movie are some words of wisdom by one of Bud Fox's older co-workers, Lou Mannheim (whom Oliver Stone refers to in the film's commentary as a representation of his own father). Mannheim has the following to say:
  
  - "The country's goin' to hell faster than when that son of a bitch Roosevelt was in charge. Too much cheap money sloshing around the world. The worst mistake we ever made was letting Nixon get off the gold standard."
  
  - "Remember there are no shortcuts, son. Quick buck artists come and go with every bull market, but the steady players make it through the bear market."
  
  - "Stick to the fundamentals. That's how IBM and Hilton were built. Good things, sometimes, take time."
  
  These quotes sound like they could have come from Ron Paul or Peter Schiff! This is hardly the pro-union, anti-capitalist movie you make it out to be in your article. I urge you to watch it again with these points in mind. You may find that you enjoy it even more.
  
  Sincerely,
  Charles J. Walker
  

  Published: July 20, 2009 4:09 PM

• S Andrews

  Charles J Walker,

  You make some excellent points. I do remember that line about Gold Standard. However, I am unable to understand why you think insider trading is morally and ethically wrong. I know that it is illegal, but is it really immoral?

  Published: July 20, 2009 4:30 PM

• CJW

  Suppose a used car salesman rolls back the odometer on an old car. He is committing an act of fraud. No amount of research a potential buyer could do would reveal that crucial, secret, missing piece of information.

  When a company is publicly traded, it must periodically disclose vital information such as earnings, legal rulings, etc. to the public. The public can then make informed decisions about the value of the stock.

  Now suppose that you work for "Company X", and you happen to know that "Company X" is about to lose a major court case, so you tell your friends to sell their "Company X" stock before the ruling is made public. The people who buy those shares become victims of fraud, because the damage to the company has not been publicly disclosed, and no amount of research on their part could have discovered it.

  When a company is privately held, stock purchases are made by agreement, and one could contractually protect themselves from fraud.

  But with a public company, the buyers are not in direct contact with the sellers, and the only information a buyer has to go on when valuing the stock, is that which has been publicly disclosed.

  I hope that makes sense... It was written in haste.

  CJW.

  Published: July 20, 2009 5:40 PM

• BioTube

  Mr. Walker, I think the root of your problem is that you, however subconsciously, are mistaken about fraud; while you seem to define it as manipulating information that cannot be known to be otherwise, fraud is, in its simplest form, misrepresentation: the car salesman claims the car has been driven X miles, when it has in fact been driven more. Thus, insider trading is not fraud in and of itself: the insider might know the value of the stock is about to fall, but so long as he does not claim the value will go up, he is no fraudster since he's merely selling the stock with no promises.

  Published: July 20, 2009 8:56 PM

• S Andrews

  BioTube has echoed my sentiments pretty well.

  But with a public company, the buyers are not in direct contact with the sellers, and the only information a buyer has to go on when valuing the stock, is that which has been publicly disclosed.

  It is another reason why investing should be done after careful thought. If a company is not forthcoming with information, it is good reason for investors to shun it. Such companies will get lower valuation with respect to the companies with better disclosure.

  Published: July 20, 2009 10:04 PM

• clever-title

  To Arthur:
  The writers really did recognize that "greed" probably wasn't the best word.
  The line in the film reads "The point is, ladies and gentleman, that greed, for lack of a better word, is good."
  That speech is a beautifully unapologetic defense of human achievement.

  Published: July 20, 2009 10:27 PM

• Arthur Medina

  To clever-title:

  Thanks. I am going to rent the movie and watch it again.

  Published: July 20, 2009 11:34 PM

• CJW

  To S Andrews and BioTube:

  Yeah, I've thought about all that, and for a long time I used to see it your way. But as I've thought about it more and more, I've come to the conclusion that it is, in fact, immoral. Please keep an open mind, and allow me to elaborate:

  Suppose the used car dealer doesn't alter the odometer himself, but has simply been told by the person he bought the car from that the odometer didn't work consistently, and that the car had way more miles on it than the odometer stated. The dealer has not tampered with the vehicle himself. But he knows the odometer is inaccurate and does not disclose this to his customers. This is fraud. The dealer is effectively lying to his customers by way of the odometer.

  The odometer here is like the publicly disclosed information about a company. If company insiders sell their stock to the public, knowing full well that the value of that stock is worth far less, for reasons which have not yet been disclosed to the public (and this is the key), then they are like the used car dealer, falsely representing the quality of their product.

  To put it simply, when you sell stock in a publicly traded company, you are selling it to the general public. The only information the public has to go on regarding the value of that stock, is that which has been either been disclosed by the company or is otherwise publicly discoverable.

  If you are an insider and you know something about the company that the public cannot know, and you sell your stock, then you have knowingly misrepresented the quality of your goods to the buyers.

  This is different than, say, if you are *not* an insider, but simply do your own research and conclude that the stock is going to drop. Caveat Emptor certainly applies in that scenario because it's up to the buyers to do their own research, same as you.

  What makes insider trading immoral is that the insiders are privy to secret information, and they are therefore misrepresenting the value of the stock.

  S. Andrews: This is not simply a case of a company not being forthcoming with information. It is effectively that the company is *selectively* forthcoming with information, to only one of the parties involved in the transaction.

  Published: July 21, 2009 9:48 AM

• CJW

  BioTube:

  the insider might know the value of the stock is about to fall, but so long as he does not claim the value will go up, he is no fraudster since he's merely selling the stock with no promises.

  I believe you have it wrong here... You are confusing the value of the stock with its price. Going back to the "Company X" example from yesterday, the *value* of the stock (in terms of its earnings potential) has *already* dropped, from the moment the court case was decided. But until that ruling is announced, then the current, publicly available information about the company is no longer accurate. And if you, as an insider, know about the unfavorable ruling, and you sell your stock to people who cannot know it, you are misrepresenting the value of the stock.

  Published: July 21, 2009 10:09 AM

• S Andrews

  Suppose the used car dealer doesn't alter the odometer himself, but has simply been told by the person he bought the car from that the odometer didn't work consistently, and that the car had way more miles on it than the odometer stated. The dealer has not tampered with the vehicle himself. But he knows the odometer is inaccurate and does not disclose this to his customers. This is fraud. The dealer is effectively lying to his customers by way of the odometer.

  I think you are off the mark here. The car dealer is disclosing a lie as a truth. If the car had no odometer, then things would be different. But car has it, and it doesn't show the truth, hence it is a lie and fraud.

  Published: July 21, 2009 4:30 PM

• CJW

  I guess it all boils down to whether or not you believe that a "lie of omission" actually counts as a lie, and is therefore immoral. I believe does, and is.

  If you sell a product which you privately know to be damaged or defective, and you fail to disclose this to the buyer, then you are committing an act of deception.

  The same applies to a sale of stock. If the information is public knowledge, then you can assume the buyer is aware of the risk they're taking, and the responsibility for any loss the buyer incurs is entirely theirs.

  But if you know the stock to be worthless for reasons which are *concealed* from the buyer (and again, this is the key), then you are engaging in willful deception.

  Published: July 21, 2009 9:16 PM

• CJW

  Putting aside the "insider trading" debate (which I am enjoying, by the way), I still think my original point about "Wall Street" is valid.

  Whether you think insider trading is fraudulent or not, Gekko and Fox come by their inside information through less-than-honest means. Remember how Bud Fox finagles his way onto the custodial staff so he can snoop around the law firm at night, and read confidential documents? And I'm pretty sure James Spader's character is violating his contractual obligations by divulging confidential information to Bud too.

  Make no mistake, Gordon Gekko is no Randian capitalist hero. He's an opportunistic crook, through and through.

  Published: July 21, 2009 9:52 PM