Article Review: - The Greed Cycle, by John Cassidy
The article by Thomas Cassidy, points out the instrumental role that greed plays in the modern corporation. Modern Economists have always seen greed as not only a necessary element in the corporate environment, but as also a vital part of the successful evolution of a public company. As the article points out, “Economists from Adam Smith to Milton Friedman have seen greed as an inevitable and, in some ways, desirable feature of capitalism. In a well regulated and well balanced economy, greed helps to keep the system expanding”.
In the early public companies, greed was not seen as a danger, as the implicit trust that managers would not slack off, and would run the company in the
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They went on to state that competition would not solve this dilemma. This lead to a re-evaluation of the goal of corporations, from merely maximizing revenues, to maximize the value of the firm, as it was determined in the stock market.
Once the goal of corporations became maximizing the value of the firm, they attracted wealthy “corporate raiders”, who used this new corporate philosophy to launch many takeover attempts on companies, with the intent on restructuring these companies, as to increase their stock prices, so that they can “refloat” them for a considerable profit. Most of these takeovers were financed with borrowed money, hence the term leveraged buyouts, or LBOs. As the article states, “In a typical LBO, the acquirer would buy out the public stockholders and run the company as a private concern, slashing costs and slimming it down. The ultimate aim was to refloat the company on the stock market at a higher valuation”. Initially this was seen as one of the best remedies for the agency issues that surfaced between shareholders and mangers. However as the economic climate changed, many realized that the LBO was not the answer. “When the economy went into a recession during the early nineteen nineties, many of the firms that had gone private, such as Macy’s and Revco, couldn’t keep up their interest
In the corporate setting, capitalism plays an important role in the sense that it helps ensure that the decisions made by leaders, such as the CEOs, take into consideration the company’s or stockholders’ interest in gaining profit (Peñaloza & Barnhart, 2011). This implies that it compels business leaders to make decisions that minimize loses while increasing the profitability of the firm. In most occasions, this is accomplished through the application of the utilitarian and Kantian approach to decision-making. However, it’s important to note that the central implication of public capitalism is that of helping foster corporate decision-making based on the broader effort to promote the public good (Peñaloza & Barnhart, 2011).
Some people might say that greed is good because unregulated capitalism was beneficial for living conditions. This was because many inventions came along the way helping the manufacturing of products much easier and efficient. Also many people got hired for companies that were starting to flourish and made competition for various products that people often wanted. As a matter of fact, a new mindset of beginning capitalism, capitalism is the right to own and profit from you own company, surged. Furthermore, there were alot of ethnicities of immigrants, were political figures enforced
Even if the company is not taken over, the fear of takeover may prevent its co-operate board and managers from straying too far from profit maximising.
Greed is a sin of excess that every single human being has at least a little bit of. When someone has the opportunity to get as much of something as they possibly can, they will go to great lengths to get everything out of it. In the story “The Monkey’s Paw,” by W. W. Jacobs, the White family experiences a big test of greed, and they even tamper with their fate to get it. Before the Whites even knew about the paw, they were living a normal, but decent, lifestyle that got them by day-to-day without any troubles. Once they received this one idol in their life that could grant any three wishes that they could possibly think of, their mind set was altered and their greediness to change their fate kicked into play. Jacobs uses themes of
Money as the single bottom line is increasingly a thing of past. Pursued profit leads to unethical management, propagate false or misleading information, bad corporation reputation, unstable employment, reducing long run profit etc.
Greed is undeniably a characteristic of being human. Even two hundred thousand years ago, when the first examples of modern humans were in a competition for food and survival, they naturally had to be greedy in order to survive and contribute to the gene pool in order for further generations to evolve and adapt. Darwin proved this with his theory of evolution stating that the species that are better adapted to the environment would be able to spend less time looking for food and more time mating (contributing to the gene pool), while the species who are not as well adapted would die off. The play “Macbeth” and the motion picture based on the book “A Simple Plan” display these themes of greed profusely as the main characters from each are affected by the same characteristic that had previously allowed for human survival. Macbeth in Shakespeare’s “Macbeth” and Hank in the film “A Simple Plan” are both affected by greed as they both turn into murders who backstab their friends, they both ruin their relationship with their wives, and they both end up destroying their lives.
The economic nature of private corporations is to be profit-seeking agents whose sole focus is to maximize shareholder value. This is a fair reason and a reason that will always exist. Detractors of privatization and free market systems, argue that
During the early 19th century the market, economy, and communications began expanding rapidly. As these were developing and expanding there was a hunger for more. A hunger for more power and wealth. This starving hunger for more is known as greed. Greed poses the question “is greed good”? So , is it? Is a need or want for more, good? And if so, how? After analyzing and depicting articles about the 1800’s it is evident that greed is good, and here’s why;
Nowadays, after the passing of several bills constraining the actions of corporations, acting in a similar manner would pose several legal and ethical issues. This is why, Freeman argues, this ancient idea of managerial capitalism is no longer effective.
An obsession of any kind is usually unhealthy, but obsession with money can destroy the soul. Karl Marx believed that human activity is paralyzed by the capitalist system. To be sure, the all-encompassing passion for wealth and power is unchristian, but is all capitalism evil? If the answer were yes, then abandoning capitalism, with its central goal of profit, would seem to be an obvious solution to the social ills of mankind. Of course, eliminating capitalism is not the answer. The fact is that capitalism, based on free competition without deception or fraud, can lead to justly obtained profits, while serving the common good.
Can business thrive by profit alone? Barry (2000) described Milton Friedman’s short essay, in the 1970’s, as extremely controversial, in which he denied that corporate executives had any moral duty to relax the conditions of profit maximization on behalf of the wider interests of society. This example of the “bottom line” of business has been demonstrated within the past couple of decades by publicly criticized companies, for fraudulent activities, such as, Enron, WorldCom, and HealthSouth along with many others. These company executives were willing to sacrifice the vast majority and greater good of society for profit gains. This mindset left many of loyal investors, consumers and employees without a sound stabilized future. There are also many businesses that produce a high yield on their investments;
The main reason that large corporations are in dire need of money is simple, greed. Financial institutions went out and found people who wanted to purchase a house, but couldn’t afford it, because of bad credit reports, debt, income, etc. So the banks went out on a limb with these risky people, and loaned them “x” amount for the house. Banks were only trying to make some money off of the outrageous interest rates of the mortgages, because that’s what banks do, they make money. Now banks and other lenders did this type of business on a large scale. People loved the idea that they could go out and get a mortgage on let’s say a four hundred thousand dollar house, with a bad credit score and slightly above minimum wage salary. Can you see
Anger and helplessness were the first emotions that I felt while watching the movie, “The Inside Job.” I was reminded of another movie portraying greed and ruthlessness, Oliver Stone’s 1987, “Wall Street,” which introduced “Greed is good” into the American vernacular (Gordon Gekko). Obviously, the instigators of the 2008 financial crisis embraced the “Greed is good” adage.
By definition, Capitalism is an economic system controlled chiefly by individuals and private companies instead of by the government. In this system, individuals and companies own and direct most of the resources used to produce goods and services, including land and other natural resources labor, and “capital”. “Capital” includes factories and equipment and sometimes the money used in businesses (Friedman, 5).
Greed can have negative and positive impacts on a business and in one 's personal life. Greed can be positive because it can drive competitiveness and motivate people to be successful. When employees are motivated it creates a successful business that thrives in a competitive environment. Another reason that supports greed is it helps people develop goals. The need for money drives people to work harder so they can use money to reach their goals. For example if your goal is to travel the world or retire early, you need money to reach these goals. Greed helps humans fill their needs. It allows people to buy houses, buy food and build a family. Money is needed to do many things in life, greed causes people to work harder in