In 1987 film Wall Street, Gordon Gekko famously said “greed is good”. The sequel was released in 2010. Given the recent banking crisis and subsequent recession, can greed ever be good?
Greed, the short word naturally arises with human instinct. Undeniably, its meaning seems negative, not a positive one. Although it is human instinct, no one proudly announce to others that they are greed. In other word, how can we judge that greed is good or bad by which extent? In this essay, I will describe and elaborate the extent of greed and link it to recent financial crisis phenomenon in the economic system.
Originally, greed can be defined as “a very strong wish to continuously get more of ...view middle of the document...
But what the extent of the greed that it should be enough. In aspect of financial service industry, can they behave following originally human instinct by greed in their career or in their institution even in their society?
Unfortunately, many financial disaster events arose from self-interest of financial officers. Unsurprisingly, it can be said that people are naturally greed, always desire unlimited craving benefit for themselves. According to Smith (1982), he said that the excessive pursuit of desire could lead someone violate the others’ right or disregard their responsibility to the public. Moreover, he also stated that business chiefs are hard to conform to the right thing because of an improper longing from their self-interest (Smith, 1982 as cited in Wight, 2005). In another aspect, Duska and Clarke (2002) argued that innate human beings could lead to a lack of conducted in their responsibilities and might earn their own benefit by others from selfish and greed those are their fundamental instincts. Moreover, they claimed that this nature human being lead to the rise of ethical trouble in financial services industry (Duska and Clarke, 2002).
Truthfully, regulation and code are useful to shield people in financial industry misconduct their duty from human sin. The financial agents must observe for the client’s interest instead of putting their interest and resist their temptation in using other benefit for their own (Duska and Clarke, 2002). Therefore, people who work in financial industry as financial fiduciaries must comply with their duty and regulation. Boatright (2008) agreed with this by stated that “A fiduciary duty may be defined as the duty of a person in a position of trust to act solely in the interest of the beneficiary, without gaining any material benefit except with the knowledge and consent of this person” (Boatright,2008). The relevant word that should be considered in financial fiduciary is self-interest.
Surprisingly, self-interest that could be said it is the human selfishness has a good side not only a bad side. There is a point of view that support “greed is good”. “Greed is good” is related with free market point of view and capitalism (Walker, 1992).From Smith’s point of view in The Wealth of Nation, he argued that self-interest is the driving force of productivity growth from their overwork because they seek out for wealth and power. Moreover, he concluded that although man has a flaw from greed, they give the advantage to the society by creating more productivity (Smith, 1981 as cited in Wight, 2005). This could be said that self-concerned people are not only made advantages to themselves but also other people in the society by their manner. Explicitly, a capitalism theory supports greed’s advantage. From the laissez faire, the French word translates to “Allow them to do” (Mankiw, 2008) or can be described as free market that invisible hand work independently for social welfare (Walker, 1992)....