The economic system of the modern world is based on greed:
everyone is always supposed to try to make as much money as
he or she can. Since, if something is scarce its price will
rise, all resources will always be employed in the most
efficient way as they chase the greater profits brought about
by those high prices. This system is by far the most
successful at creating great wealth.
Recently the greed has gotten out of hand and it has led to
theft and fraud. The corporate officers of several of
America's biggest and most prominent companies were indicted
for crimes that were clearly motivated by greed. The leaders
of a conglomerate called Tyco are accused of looting $600
million from their corporation, beyond the millions that they
were legally paid. Arthur Andersen, one of five huge
accounting firms in the United States and all around the
world, collapsed after it approved dubious practices in
several companies over many years and then was convicted of
not cooperating in an investigation against it.
Worldcom is a huge telecommunications company that is one of
the pillars of America's telecommunications system. For years
its financial performance was unbelievably good. Many of
their competitors strained themselves to try to emulate them.
It turns out that their numbers were too good to be true:
they were fraudulent. The company has restated its past
profit performance, and top officers will be tried. Senior
management raked in hundreds of millions of dollars from
selling stock and stock options.
The first failure was really a Texas company called Enron.
Though no longer the largest failure (Worldcom took over that
dubious honor) it was in many ways the most spectacular. It
was among the most admired and apparently fastest growing
companies in America -- before its main skill was shown to be
a flair for fraud. Disguised loans, market manipulation in
California, conflicts of interest, artificial transactions to
bulk up its business -- these have been revealed so far but
who knows what else remains hidden? A large part of its
apparent achievement was developing an energy trading market,
but now it turns out that most of that development was a game
of mirrors. Now that Enron has gone, the whole market has
shrunk enormously and the other companies that were in the
energy trading business have gone bankrupt or drastically cut
This list could be made much longer.
The government of the United States realizes that it must do
something. There is dissatisfaction with the exposed
corruption. But there can be a problem, as put very sharply
by Theodore Roosevelt, in a speech called "The Man with the
Muck Rake" made almost 100 years ago:
"So far as this movement of agitation throughout the country
takes the form of a fierce discontent with evil, of a
determination to punish the authors of evil, whether in
industry or politics, the feeling is to be heartily welcomed
as a sign of healthy life.
"If, on the other hand, it turns into a mere crusade of
appetite against appetite, of a contest between the brutal
greed of the `have nots' and the brutal greed of the `haves,'
then it has no significance for good, but only for evil."
The events that came to light in the past year have shown
very clearly how greed can lead to theft and fraud. Greed in
fact is a normal human desire. If tempered by restraint and
guided by morality, it can be a powerful force for good, and
if not, it will result in terrible evil.
Again we see how essential morality is for success of any
kind in the material world. People repeatedly think --
individually, collectively, privately and publicly -- that
they can get away with it. But in the end, morality is