Goldman Sachs’ Greed?Mar 16, 2012 at 05:46:30 AM
In the seminal film Wall Street, Gordon Gekko declared: "Greed is good. Greed is right. Greed works. Greed… has marked the upward surge of mankind."
This week in a New York Times op-ed, an "anti-greed" crusader by the name of Greg Smith announced his resignation from the financial giant Goldman Sachs. Smith, whose clients had a total asset base of more than a trillion dollars, describes the firm's practice of "persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit." In other words, Goldman Sachs cares more about making money from its clients than making it for them.
Irrespective of whether the allegations are true or not, I don't know why we should find this surprising. When I hire a lawyer to represent me in a damage lawsuit, I am aware that he is primarily representing his own interests (profit, professional reputation, time constraints) than he is representing mine. In politics, too, the vast majority of elected officials are "looking out for number one," often at the expense of their constituencies.
Back to the financial sector. Capitalism is a wonderful institution. It improves the quality of life by fostering competition and yielding advances in many fields. Without competition we would be at the mercy of monopolists that would stifle progress and incentive for personal reward.
Yet let's be clear: The goal of capitalism is to make money. Period. Of course, many "capitalists" are caring, ethical human beings. But those values are distinct from the pure pursuit of wealth. And in a myriad of cases, the two goals will conflict.
That is why, if left unrestrained, many will choose the route of pure profit. The result, as we have tragically witnessed, is greed, corruption, and an erosion of trust that prevents the building of a fair and harmonious society.
The Jewish ideal ― built-in to Jewish law ― is that commerce must be balanced with genuine care for others. For example, the Torah (Deuteronomy 19:14) forbids a merchant from lowering his prices to the extent that it is not feasible for the competition to remain in business.
The Torah's goal is to create a just and compassionate society. Economic progress? Yes. Cutthroat competition and working against the interest of your own clients? No.
Maybe it's time to launch a Torah study revolution over on Wall Street.