Let me tell you, Cassius, you yourself
Are much condemn’d to have an itching palm.
, William Shakespeare
“Julius Caesar”
Is money the root of all evil? Hardly. But greed , the “love of money” which is actually the often-misquoted line from the New Testament , certainly is causing some evil repercussions in our economy. And unless we get a grasp on our avarice, the love of money may be the undoing of us all.
There is certainly nothing wrong with rewarding hard work with a fair profit. I draw the line, however, at the need for what is now euphemistically referred to as a robust profit , invariably the result of monopolistic or collusive price-gouging.
It’s often been said there is a very thin dividing line between free enterprise and criminal enterprise; too often greed drives us across that line. When it does, it not only harms those who are toeing the line, it eventually comes around to trip those who crossed it.
Take the energy crisis. Everywhere you look in this charade, you see self-proclaimed victims. But how many of these victims are actually victimizers themselves?
Recently, Texas-based electricity producer Dynegy, Inc. ordered San Diego Gas & Electric Co. to shut down 17 small “peaker” power plants the utility operates for Dynegy under contract. Dynegy officials ordered the shutdown, they said, because the California Independent System Operator (Cal-ISO), the agency responsible for maintaining the state’s flow of electrons, hadn’t paid for the power it was buying from Dynegy.
A few days later, the Federal Energy Regulatory Commission accused Dynegy and two other energy wholesalers of price-gouging Californians to the tune of more than half a million dollars, with $470,000 of that gouging done by Dynegy alone.
And that’s a pittance compared to the nearly $7 billion Cal-ISO says energy producers have gouged Californians for over the past year.
So did anyone in Dynegy’s Ivory Tower stop to think if they weren’t price-gouging Californians, they wouldn’t be experiencing a cash-flow problem? Probably not. Greed screws up your thinking that way.
Let’s look at the state’s investor-owned utilities , San Diego Gas & Electric Co., Southern California Edison, and Pacific Gas & Electric , who have been singing the blues ever since energy deregulation sent power prices peaking to unheard of heights and prompted state regulators to levy retail price caps on energy.
Yet it was these same utilities who knowingly foisted an unworkable deregulation plan on us, one based on a dysfunctional scheme that sent energy prices in the United Kingdom spiraling out of control.
Why would they do so?
Because the allure of fast, massive profits from skyrocketing energy prices blinded them to common sense. Consumed by their own hubris, they never once considered the public backlash that would develop. Greed blinds you that way.
Greed is a kind of fear.
, Cyril Connolly
British critic
The energy industry isn’t alone in such avarice, though since the advent of deregulation it has certainly taken strides to be No. 1 in its practice. You can see the same sort of cupidity in nearly any industry.
From my vantage point as an observer of the business world, I find myself repeatedly reminded of a late-night confrontation I watched in my back yard between a mature possum and a baby skunk over a bowl of dry cat food.
The baby skunk, too young to be wary of the much larger possum, was more than willing to share the discovery. The possum, however, was determined to have the entire bowl of food himself.
After many failed attempts at running the skunk off, the possum finally decided he could keep the entire bowl to himself by laying his body spread-eagle across the bowl.
The skunk, however, was still able to feed himself by poking his little snout into a gap between the possum’s belly and the edge of the bowl. In his position, however, the possum was unable to enjoy a single bite. His greedy fear of missing even a single morsel of food had left him in a position in which he was unable to enjoy any of it.
Greed is a bottomless pit which exhausts the person in an endless effort to satisfy the need without ever reaching satisfaction.
, Erich Fromm, psychologist
“Escape From Freedom”
In the military they call it target fixation. A pilot might become so focused on his target, he loses sight of his situation, often crashing his aircraft into the target.
Greed blinds in the same fashion. In the mid-Eighties so many of San Diego’s most prominent citizens were taken in by financier J. David Domenelli because his claims of 50 percent return on investment blinded them to the obvious: He was running an old-fashioned Ponzi scheme.
We saw that again during the dot-com craze when hyped-up promises of quick returns blinded people to the fact these companies had no products, no profits, no customers , in fact, nothing to offer anyone at all. To be blunt, fear of missing that Big Opportunity drove investors to be stupid.
The cost of avarice extends beyond the destruction it wreaks on the economy which provides its playground. The I-got-mine-you-get-yours attitude that has pervaded business in the last 20 years has cost us our standing in the community.
As a panelist at a recent Economic Development Corp. breakfast, I brought an uncomfortable hush over the crowd when I pointed out the public polls showed Americans distrusted and vilified business people.
Gone are the days when business people were seen as the stalwarts of the community, the builders of neighborhoods and civic leaders. Today, business people are blamed for the high cost of energy, housing and rationed managed health care. They are seen as corporate welfare cheats, sucking up government tax money better thought spent on improving the lives of the citizenry.
A study issued last year indicated more college students were opting for majors in social services, turning away from the lifestyles of their business-oriented parents who, apparently, had missed too many Little League games, school plays and recitals in pursuit of profit.
Perhaps I’m old-fashioned , I’m definitely getting to the age where that’s a possibility , but I miss the days when business was conducted with honesty and dignity, when business leaders strove to build communities, not shred them in the pursuit of the bottom line, a quarterly profit report or an annual bonus.
I recognize, of course, not everyone agrees with me. There are those who believe the unbridled pursuit of money is a healthy endeavor. Consider this quote, for instance:
“Greed is all right I think greed is healthy. You can be greedy and still feel good about yourself.’
Ivan F. Boesky said that at a 1986 commencement address for the School of Business Administration at UC Berkeley.
Shortly afterward, Boesky was convicted of illegal insider trading.
Hill is editor of the Business Journal.
