“Greed is Good:” Oliver Stone’s “Wall Street” 36 Years later
The movie “Wall Street” came out in 1987 when I was 25 working as a junior investment banker, and it immediately became the iconic symbol for the brash Wall Street culture that emerged in the 1980s. (Suspenders and yellow ties were icon runners-up.)
Greed is Good is the movie’s most famous line, spoken by the villainous Gordon Gekko (Michael Douglas), an insider trader and corporate raider. Back then, “Greed is Good” represented a despicable and corrupt attitude. Thirty-six years later, it’s become our culture’s dominant philosophy. We all live in Gordon Gekko’s world now.
The movie’s plot is centered on how a junior stock broker, Bud Fox (Charlie Sheen), is sucked into Gekko’s insider trading world. Like Stone’s movie Platoon, Wall Street is a battle between two “fathers” for the soul of a young man. 1
Bud’s father in the movie (and in real life) is played by Martin Sheen who represents the slow and steady and honest blue collar approach to success. He lives in Queens and is the head of an airline maintenance crew who look up to him as their tough, but fair boss. Bud and his dad make the same salary, but Bud’s always asking him for a loan.
The fast talking Gekko (a reptile as manipulative and seductive as the snake in Eden) becomes Bud’s rival father. Gekko can smell how badly Bud wants success at any cost and cozens him to become his accomplice in gathering inside information. He dazzles Bud with the outward flash of his world: the top table at “21,” the Hamptons beach house, a setup with a girl (Daryl Hannah) who matches Bud’s materialistic desires. 2
Corruption Then and Now
Gekko’s sin is insider trading, a crime that can be one of the hardest to prove, unless it’s absolutely blatant.
Bud Fox makes his bones with Gekko by surreptitiously following a British corporate raider, played with a rough haughtiness by Terence Stamp. Bud trails Stamp to a private jet airfield and finds out his plane’s destination, which gives away the company Stamp is after. This allows Gekko to step in front of Stamp to buy up the company’s shares.
Is that illegal or just smart? It’s one corporate raider screwing over another.
Today, hedge funds have proprietary satellite images of retailers’ parking lots to gauge activity, and “quant” hedge funds have sophisticated algorithms that allow them to make money stepping in front of retail investors’s trades for pennies per share that can add up to billons in annual profits. These information edges are legal, but they can be placed in the same genus as what Gekko does, if not the same species.
In 1987 Gekko repelled me just as he was supposed to. Today, I find him more interesting than repugnant. More rogue than reptile.
Why? Just look at the list below of some of the most egregious financial corruptions of the past 15 years. And compare them to insider trading.
The Madoff fraud.
The corrupt and irresponsible behavior that led to the 2008 crash for which, inexcusably, no one was prosecuted.
The lurid crimes of Jeffrey Epstein, a creature of Wall Street.
The Sackler family and their decisive and dreadful role in the opioid crisis.
Citizens United and the resulting ability of the wealthy to have undue influence over our politicians and judges.
The Financialization of the American Economy Then and Now
Back in 1987, Wall Street was just a particular industry that was having a boom. Not many people were “in the stock market” or cared too much about it. Most non-Wall Street people got their information from stock market tables that were printed in the next day morning papers.
In 2023, the stock market in America has become ubiquitous. The portion of household wealth that the stock market represents has gone up 20x from $1.6 trillion in 1987 to $34 trillion today, most of that increase accruing to the very wealthy. Mega billionaires have become American celebrities, just like movie and sports stars. People like Buffet, Gates, Bezos, Zuckerberg, Musk. 3
What happens in the stock market and what happens in the real economy are now inextricably intertwined. When households feel wealthier, they spend more money, and vice versa. If the stock market crashes, we’ll all be screwed, just like in 2008.
Corporate raiders like Gekko are pikers compared to today’s gigantic private equity industry that controls a huge slice of the American economy and owes their fiduciary duty to their investors alone. Not to their employees and not to their communities. And that’s largely true for every corporate board and every CEO of a public company. Everything is done in thrall to the stock price.
America is Wealthier than Ever: the Moral Price
Since 1987, America has become much wealthier, and a lot of that is due to the gospel of greed is good. But we’ve paid a huge moral price. The growth in inequality and the sense that the game is rigged has angered a significant portion of Americans. The growth of invidious comparison through pervasive social media has led to consumerism run amok and much unhappiness.4 The increased socio-economic stratification of where people live and send their children to school has hardened intergenerational bubbles, especially at the extremes of the wealthy and of the impoverished. The difference in life expectancy between those extremes is fifteen years for men, ten years for women. 5
I’m troubled by the thought that we all live in Gordon Gekko’s world now. Yes, most of us are more ethical than Gekko, but all of us are ensconced in a system that begs for reform.6 If not, we’ll reap the whirlwind of what happens to a country when it declares moral bankruptcy. As to bankruptcy, I’ve read that it can happen gradually, and then all at once.
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Notes
In Platoon, Charlie Sheen’s character, a private serving in Vietnam, is caught between the ethos of two sergeants, Willem Dafoe—a good soldier and friendly with his men vs. Tom Berenger, a bitter, no-nonsense killing machine.
Women are generally displayed as objects rather than people. This is consistent with the warped ethos of Wall Street in the 1980s and for many decades after. The first “perk” given by Gekko to Bud Fox is a surprise visit from a call girl who takes Bud to a limo where she gives him champagne and cocaine as a prelude to a blowjob.
Source for household wealth: Federal Reserve. Includes direct holdings and mutual funds; does not include equities in pensions.
For more on envy run amok, I recommend
who writes well and deeply on the subject atSource: The Association Between Income and Life Expectancy in the United States, 2001-2014. Chetty, Stepner, Abraham, Lin, Scuderi, Turner, Bergeron, and Cutler (2016)
I recommend an incisive, recent post “De-Gamify The Earth” by
in It captures concisely how overtaken we’ve become with forever amassing more and more.The one minute scene below slayed me when I watched the movie in 1987, because it made me feel I’d never become a “real player.” No matter the era, all 25 year olds on Wall Street are to some extent greedy little striving bastards! I was no exception.
I am often struck by the simplest form greed takes; profit is never enough. It must be greater. In that realm, earning a return of 8% is not enough. If we earned 8% last year, we should earn 9% this year. Of course, 8% was enough for everyone to enjoy the profit and 8% of this year's increases sales would mean an increase, but 8% would be seen as flat and we can't have that. Oh, let's also be clear that 7% would be a loss, which mathematically it is not, because all that matters is year-to-year comparisons.
I wish some company would say, even once, that last year we earned 8% and we all lived comfortably so this year, since we earned 9%, we are giving the full additional 1% to our lowest level employees, those who actually make the product or deliver the service that earns our profit. Alternatively, we will lower prices to target 8% again for next year, that being adequate for us.
"Enough is enough!" is only uttered by frustrated parents. It is never said in boardrooms.
David [with respect], your post raises some very good questions. But we have to be careful. Most roads correcting for "class inequality" lead to dangerous places. The world is littered with examples of such correction. One of the truly admirable things about much of American wealth creation, and also what is uniquely American, is a result of the kind of economic mobility that does not exist anywhere else in the world e.g., "Mega billionaires have become American celebrities, just like movie and sports stars. People like Buffet, Gates, Bezos, Zuckerberg, Musk." You say this with derision (I think) but ALL these men are largely self-made (compare them to the top 1% elsewhere in the world). The main reason people from the rest of the world are still dying (often literally) to come to America is largely because of this. Socialist, (still) feudalistic-minded, class obsessed cultures even in Western Europe are much worse. I grew up in socialist (not even communist) India and I know what that was like. Lack of economic opportunity is a curse much bigger than just "not having nice things". Separate topic for another day...
But I agree with you as well.
Something is broken when our economic mobility leaves behind vast communities hollowed out by the same factors that create gargantuan wealth. It asks for a complicated balance. I don't believe in single cause attribution but one of the reasons our blue collar communities feel jipped is because our other institutions, especially education + healthcare, have utterly failed them. And now insulting the injured, the "elite" guard their wealth while laughing at those left behind (blue collar, "fly over" country) in our snotty culture wars.
The other failure has been poor oversight of/by government agencies (esp the 3 letter, thoroughly unelected ones, SEC, FTC, DEA, FDA...to name a few) which has resulted in an unholy nexus between politicians and those with the greatest economic power (industry / gov revolving doors, lobbying for fav regs, etc etc). The challenge is breaking this nexus without giving more power to politicians and bureaucrats because they're all for sale. We should note all these agencies were created from the same logic.
Finally I'll just say, encouraging a culture to be less greedy/ materially obsessed will not come from government fiat, which brings terrible unintended consequences. The search for meaning can't be imposed, it has to be sought. Not offering simple solutions here but I do know which "solutions" will be worse. Kinda' like democracy... Thanks for your post.