Mark Byron discusses how the treatment of corporations affects us as individuals. Let me attempt to add some points, related to the issue of greed.
For all the talk of corporate greed, a lot more good would actually be done if people stopped complaining about corporations and started investing in them instead. At one of my past Unitarian dinner discussions, someone was complaining about how the greedy insurance executives were hiking their insurance premiums in the wake of September 11. My reply? Sounds like an investment opportunity! Maybe you should check them out. They didn't appear to be amused. I guess they can justify their response by claiming to be socially concious investors, but the bottom line still is: the primary goal of investing is to make money, the same goal as those "greedy executives". If I was an investor in World Wide Wickets, I'd be happy if their CEO was considered a bit greedy by some people, as long as that greed benefited the company. There are limits to such behaviour of course, but in my view, these limits are enforced very well by the concept of a free market. When someone demands too much money for a good or a service, someone else will see an opportunity to move in and sell for less.
Now there are some egregious examples of greed in the boardroom. Ken Lay (Enron) and Dennis Kozlowski (Tyco) come to mind. These guys were outed when their companies lost money and their salaries and perks were subjected to increased public scrutiny. Some people think we need to ensure that such things cannot happen again, but I don't think government regulation of executive salaries is appropriate. A government based on a free-market economy has no business telling people how much they can earn. While many people would applaud it, there would be serious negative consequences of a maximum wage law.
Where do I draw the line? On the one hand, I'm a free-market capitalist, and basically believe that an unreined economy will be more prosperous. On the other hand, I've got to admit that there are real oppressors out there, who will take advantage of those who are unable to understand the complexities of our modern world. I think there are good arguments to be made for consumer protection laws and government agencies to help people avoid being ripped-off from fraud, and to punish those businesses who deploy fraud as a business practice. I just don't buy that excessive greed, in the absence of other factors, is grounds for government regulation.
Posted by joelfuhrmann at November 13, 2002 01:03 PM