Greed Prevents Good

In 1986, Ivan Boesky spoke here at our university and proclaimed “greed is healthy.” Lore has it that Boesky and this speech inspired the Gordon Gekko character in Oliver Stone’s “Wall Street,” and the “Greed is … good” speech. Now, some 25 years later, seven studies we conducted, some on this same campus, have proved the opposite, that greed, far from being good, undermines moral behavior.

In this research we looked at the ethical conduct among society’s haves and have-nots. In one study we found that wealthier subjects cheated more. After five apparently random rolls of a computer die for a chance to win some cash, wealthier participants were more likely to report scores higher than 12 — even though the game was rigged so that scores higher than 12 were impossible. When we positioned assistants at four-way traffic stops and pedestrian zones, wealthy drivers in high-priced cars were more likely to cut off other drivers or ignore pedestrians. In still other studies, the wealthy were more likely to lie in negotiations and endorse unethical behavior at work, like deceiving clients for profit. Wealthier subjects even took more candy from a jar that was ostensibly for children.

Unethical behaviors among the wealthy are as timeless and pervasive as the ethical principles that try to rein them in. Our research pinpointed why wealth produces unethical conduct with such regularity: greed. Across studies, wealthier subjects expressed the conviction that greed is moral, echoing Boesky and Gekko and their intellectual companions (e.g., Ayn Rand). And it was their greed-is-good attitudes, we found, that gave rise to their unethical behavior. Wealth gives rise to a me-first mentality, and the ideology of unbridled self-interest serves as its lofty justification.

Greg Smith is to be applauded for calling out the culture of greed at Goldman Sachs. It is a knockout blow, one as important as Ivan Boesky’s proclamation nearly a generation ago. Nobel laureate Milton Friedman famously argued that the single social responsibility of business is to increase profits as long as “it stays within the rules of the game.” The problem is, when greed for profits is the bottom line, the rules may fall by the wayside.

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