Wall Street (1987) — “Greed is Good”
I just re-watched the original 1987 film, Wall Street. (The sequel, Wall Street: Money Never Sleeps, is in theatres now, and apparently doing very well.)
In the original Wall Street, Michael Douglas’s character, Gordon Gekko, is a corporate raider — essentially, he buys up underperforming companies, breaks them up and sells their parts at a healthy profit. What drives him? Greed, pure and simple. In one scene, Gekko appears at the annual shareholders’ meeting being held by Teldar Paper. Gekko owns shares, but wants more. He wants control of the company, though his motives for doing so are hidden. It is there that he delivers the speech that includes the movie’s most famous line. “Greed,” he tells the shareholders of Teldar, “is good.”
That line is the only thing a lot of people alive in the 80’s remember about Wall Street. And that’s a shame.
Here’s Gordon Gekko’s famous “Greed is good” speech, in its entirety:
Teldar Paper, Mr. Cromwell, Teldar Paper has 33 different vice presidents each earning over 200 thousand dollars a year. Now, I have spent the last two months analyzing what all these guys do, and I still can’t figure it out. One thing I do know is that our paper company lost 110 million dollars last year, and I’ll bet that half of that was spent in all the paperwork going back and forth between all these vice presidents. The new law of evolution in corporate America seems to be survival of the unfittest. Well, in my book you either do it right or you get eliminated. In the last seven deals that I’ve been involved with, there were 2.5 million stockholders who have made a pretax profit of 12 billion dollars. Thank you. I am not a destroyer of companies. I am a liberator of them! The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA. Thank you very much.
The first thing to note about this speech is how little of it is actually about greed — roughly the last third of the speech. The first two thirds is a critique (disingenuous, as it happens, but not therefore off-target) of the complacency of overpaid corporate executives. Gekko is advising Teldar’s shareholders that the people responsible for protecting their interests — Teldar’s executives and Board — have been doing a bad job.
How does that first part relate to the final third of the speech, the part about greed being good? Well, it’s worth noting that when Gekko first uses the word “greed,” he does so “for lack of a better word.” And Gekko, one-dimensional character that he is, probably does lack a better word for it. For him, it really is greed — the unseemly and excessive love of money. But Teldar’s shareholders don’t need personally to embrace greed in the Gordon Gekko sense. All they need to do is to see that their interests are not being served well, and to understand that Gekko’s own greed is likely to serve them better: he wants to make a killing on the Teldar deal, and if they let him do so, they’ll all make a little money themselves, along the way. His greed is good for them.
Is Gekko’s greed a good thing over all? Well, Gekko says nothing, in his speech, about the interests of other stakeholders in Teldar Paper, stakeholders such as the company’s employees for example. If Gekko breaks up the company, shareholders may benefit but employees will lose jobs. That’s a bad thing, but it’s also sometimes inevitable. Not all companies should stay in business.
No, greed is not good. But the point — the grain of truth in Gordon Gekko’s Machiavellian speech — is that if shareholders allow executives and Boards to operate inefficiently, rather than using what little power they have to improve their lot, then they are suckers, being taken for a ride. And there’s no particular virtue in that.
The Business Ethics Blog 
Have you seen the sequel yet? I plan too soon.
I think it goes without saying that self interest can be a productive thing as Ben Franklin and Adam Smith both thought. But greed can o too far into narrow-minded self-interest that puts us all in jeopardy. As Robert Reich points out in his new book:http://www.nytimes.com/2010/09/26/books/review/Mallaby-t.html
Deregulation that effectively concentrates wealth in too few greedy hands puts us all in danger. Thus the wealthy are better off with somewhat less long-term than a bigger share of a lackluster economy.
That’s called enlightened self interest. And I would like to see a lot more of that!
Julian:
No, re-watching the old one was prep for seeing the new one, hopefully soon. You’ll see a review here as soon as I get the chance.
Cheers,
Chris.
That was an excellent summary of the 1987 film “Wall Street”, especially “setting out the entire “Greed is good” speech.
Now I really should also watch the film once more to refresh my memory, but it is my recollection that what I found most disturbing and infuriating about Gekko’s behavior was not so much the greed factor in and of itself, but Gekko’s frequent use of unethical and unlawful means to achieve his desired results; i.e, unfair use of insider information, intentional release of false and misleading information. In other words, Gekko didn’t play fairly by the established rules. After all, cheaters are universally frowned upon for their dispicable behavior.
John:
Good point. You remember correctly! Gekko isn’t just a greedy guy — he’s a greedy guy who is willing to use illegal means to satisfy his wants. Big difference!
Chris.
The mantra of the sequel to the movie Wall Street is: “It’s not about the money; it’s about the game.” The game is to be important and accumulate as much wealth as possible by beating the stock market. In other words, greed is still good in the sequel to the 1987 film. I highly recommend it as an example of how so little has changed in the investment banking industry since the original.
Steven:
I’m looking forward to the sequel, but I’m not sure it can plausibly serve as an example of anything. It is, after all, a work of fiction. Hopefully it is at least thought-provoking, though!
Chris.
I agree with your grain-of-truth conclusion, but I disagree with your characterization of Gekko and his sloppy use of the word greed. If Gekko were really only a one-dimensional character the movie wouldn’t be as interesting (villains with some complexity always make the story more interesting). I think he knows exactly what he’s doing when he uses the word greed: he is cleverly appealing to the value intuitions of the audience (that justice is based on what people deserve) to make it seem like the solution is greed: the cure for inefficiency is greed. “The lack of a better word” qualifier is made to alert you that you don’t understand greed properly; you automatically react negatively to it, but if you reflect on greed you’ll see that it is the proper (social darwinistic) attitude to hold. Gekko is master manipulator! Recall the scenes where he tries to fool Bud’s father or when he does fool Bud into thinking that he’s interested in improving the airline instead of breaking it up for money. Just my amateur character analysis.
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I totally agree Greed is good because it increases productivity
It likely does increase productivity, but that’s hardly conclusive. There are other factors to consider, before reaching a conclusion. Greed also has OTHER effects, beyond productivity. And and if productivity is what you’re looking for, greed isn’t the only mechanism available
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By all means Gekko is justified in his doings. He is a go-getter; willing to break and remake rules to earn profit. Milton Friedman says, “The Social REsponsibilty of Business is to increase profits”. Fox,on the other hand, wants to be Gekko while retaining his character; it cannot happen because Gekko is a product of SMART dealings. He knows when and how to count when the deals are done. Fox is the prodigal dealer who almost became the best. It is time for the unfittest to rule the market.