The moral ambivalence of Gordon Gekko

Wall Street turns 30 this year. Is the movie’s hero a miscreant or a role model?

Credit: Kelsey Dake

John Paul Rollert

In-House Ethicist

John Paul Rollert | Aug 18, 2017

Sections Behavioral Science

Collections Ethics

If director Oliver Stone and I had a nickel for every time someone uttered the words ‘greed is good,’” screenwriter Stanley Weiser noted near the end of 2008, “we could have bought up the remains of Lehman Brothers.” The two men had collaborated on Wall Street, the film that introduced the world to Gordon Gekko and gave that impish expression—greed is good—the tendentious twinkle of immortality. 

The movie celebrates its 30th anniversary this year, and remains a favorite among the heroes of high finance, primarily for the infectious appeal of Gekko and his unapologetic pursuit of greenbacks. Of course, it is the very same behavior that makes the character’s name an enduring libel for outrageous efforts to engorge one’s bank account. S.A.C. Capital scapegrace Steven Cohen was dubbed the “real” Gordon Gekko by the Guardian in 2014, after eight of his former employees pled guilty to charges related to insider trading, while “Pharma Bro” Martin Shkreli was dubbed a “hipster Gordon Gekko” in the pages of the New York Times when he was indicted for securities fraud a year later. 

Such fishtailing between icon and public enemy is a testament not only to Michael Douglas’s Academy Award–winning performance and a collective soft spot for shameless villainy, but to an abiding irony at the heart of capitalism, a moral ambivalence that sees us not knowing whether we should wipe the grin off Gekko’s face or mirror it.

For those who haven’t recently included Wall Street in their Netflix queue, the film is something like the financial sector’s Faust, with Gekko a Mephistopheles in made-to-measure suits. It tells the story of a young stockbroker, Bud Fox (played with a careful mix of innocence and moxie by a 20-something Charlie Sheen), who longs for just a few minutes to pitch “Gekko the Great,” notwithstanding the friendly warning from a colleague that his idol is the type of guy who “had an ethical bypass at birth.” By endless bluster, charm, and finally a birthday bribe (a box of Gekko’s favorite Cuban cigars), Fox gains an audience and soon learns that the only stocks tips Gekko’s interested in are those of an illicit variety. “The public’s out there throwing darts at a board, sport,” he tells Fox. “I don’t throw darts at a board. I bet on sure things.”

Just before he is about to leave Gekko’s office, his hopes dashed, Fox blurts out a bit of inside information he has thanks to his father, a union rep at a small airline. Gekko takes a chance on the tip and turns a quick buck. Pleased by the profitable outcome and seeing something of an apprentice in young Fox, Gekko decides to draw him in, fully appreciating that those susceptible to venal sins are typically corrupted by degrees—by small compromises, shiny baubles, and sweet assurances of much more.

Gekko embodies a moral irony that, motivationally speaking, has been the mainspring of capitalism at least since Adam Smith.

And so Gekko spins his web. He rewards Fox with a first-class lunch, a trip to his tailor, and a rendezvous with a lady of dubious intention. He also plies him with money and the promise of a lot more. “I’m not talking about some $400,000-a-year working Wall Street stiff,” Gekko affirms. “I’m talking about liquid, rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, Buddy. A player—or nothing.”

Bud Fox is not exactly what you’d call a man of conscience, so the pangs of guilty misgivings are brief and fleeting. (“All right, Mr. Gekko. You got me.”) He makes a second career harvesting inside information for Gekko and spends his free time sampling the spoils—superficial relationships, art he doesn’t understand, and hobbies whose enjoyment seems inversely proportional to their expense—of his new life of white-collar crime. 

Ultimately, Fox gets his comeuppance when the Feds catch on to the clairvoyant tendencies of his broker’s account, and having ridden Gekko’s coattails throughout most of the movie, in his fall, Fox grabs hold of his cashmere hem and pulls Gekko down with him. The turn of events, stylish if somewhat predictable, led Vincent Canby to dismiss the movie in the New York Times as “a gentrified Everyman, an upscale morality tale to entertain achievers who don’t want to lose touch with their moral centers, but still have it all.” Canby’s review seemed to suggest that, as a work of social criticism, the movie came up short by favoring character defects over a flawed culture. If viewers had seen Gordon and Bud as apogees, rather than unseemly aberrations, of an era defined by decadent consumerism, they might have been more inclined to have second thoughts about their own behavior. 

Maybe so, but such reservations fail to reckon with the frightening logic of the film’s most famous scene and the declaration within it that saw Wall Street transcend the middling standards of a fairly effective potboiler to become a defining cultural moment.

A sermon on the mount for those with Swiss bank accounts, Gekko’s “greed is good” speech interrupts the stale pageant of an annual shareholder’s meeting. It begins as a conventional broadside against a tumorous class of complacent middle managers at Teldar Paper, a company Gekko’s targeted for a hostile takeover. He goes on to suggest that the company’s circumstances are emblematic of a more pervasive phenomenon. “The new law of evolution in corporate America seems to be survival of the unfittest,” Gekko observes. “Well, in my book, you either do it right, or you get eliminated.” 

Dubbing himself a “liberator” of companies rather than their “destroyer,” and noting the generous returns his takeovers have afforded shareholders, Gekko commences the homily that has made an enduring mark on the moral psychology of modern capitalism.

The point is, ladies and gentleman, that greed—for lack of a better word—is good.

Greed is right. 

Greed works. 

Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.

Greed, in all of its forms—greed for life, for money, for love, knowledge—has marked the upward surge of mankind.

And greed—you mark my words—will not only save Teldar Paper, but that other malfunctioning corporation called the USA.  

Gekko’s call to arms is something like the St. Crispin’s Day speech of contemporary capitalism—and similar to that celebrated address by Shakespeare, it too was inspired by an historical figure. In 1986, Ivan Boesky gave a now-legendary commencement address to business-school graduates at University of California at Berkeley. In it, the white-maned rapscallion of risk arbitrage trading anticipated Gekko’s war cry, albeit with counsel that seems restrained, even cautious, by comparison. “Greed is all right, by the way,” he told the graduates. “I want you to know that. I think greed is healthy. You can be greedy and still feel good about yourself.”

Having just begun shooting a movie whose working title was Greed, Oliver Stone took note of the address by Boesky, who would be sentenced to three years in prison for insider trading just days after Wall Street was released. Importantly, however, Stone and Weiser would convert Boesky’s counsel from advice aimed mainly at preserving the self-esteem of strivers (and those who had already successfully striven) into an impenitent ethics of gross acquisition. 

The change helps to account for the difference between the guilty pleasure afforded by some of the most charming villains in cinematic history and the peculiar admiration reserved for Gekko. At the time of Boesky’s homage to mammon, Newsweek noted, “The strangest thing, when we come to look back, will be not just that Ivan Boesky could say that at a business-school graduation, but that it was greeted with laughter and applause.” Such a titillating response seems consistent with reactions by movie audiences to highly charismatic criminals such as Hans Gruber, Hannibal Lecter, and Keyser Söze. But, as opposed to these and others on the list of the American Film Institute’s 100 greatest villains, it is Gordon Gekko alone at No. 24 who is at once a miscreant and a role model.

The reason for this is that Gekko embodies a moral irony that, motivationally speaking, has been the mainspring of capitalism at least since Adam Smith. As Smith famously said in The Wealth of Nations, even though every commercial agent “intends only his own gain” in his daily affairs, by “directing that industry in such a manner as its produce may be of the greatest value,” he “necessarily labours to render the annual revenue of the society as great as he can.” In other words, notwithstanding the fact that he “neither intends to promote the public interest, nor knows how much he is promoting it,” by “pursuing his own interest[,] he frequently promotes that of the society more effectually than when he really intends to promote it.”

This, of course, is the logic and labor of Smith’s “invisible hand,” and the moral irony of the mechanism is well illustrated by an infamous episode that surely won’t be included in the “Greatest Hits” reel at the retirement party for Goldman Sachs CEO Lloyd Blankfein. 

In fall 2009, Blankfein opened the doors of his investment bank to a reporter from the Times of London. For decades, Goldman had been famously press shy, but the financial crisis had thrust it into the spotlight, largely because the bank seemed to be thriving amid a global recession it helped create. 

The common good comes about not because of the express intentions of commercial agents, but despite them.

If, by granting a business-friendly publication privileged access to the investment bank, including interviews with a litany of top executives, Goldman hoped it might produce a lengthy and largely favorable profile that would turn public opinion in its favor, the effort was only partially successful. The eventual profile was indeed quite lengthy (nearly 7,000 words), but one did not need to read beyond the title—“I’m doing ‘God’s work’. Meet Mr Goldman Sachs”—to conclude the endeavor was a PR disaster.

The quote came from Blankfein himself, who, with an “impish grin,” the reporter noted, described himself as merely a banker “doing God’s work.” Interpreting that grin is essential. It was not the nervous tic of one telling an abject lie, for clearly Blankfein did not believe that Goldman was a parasite on the body politic, much less a plague. On the contrary, he maintained, “We have social purpose,” namely, to “help companies to grow by helping them to raise capital.”

Fair enough, but why the grin? Because the bankers at Goldman Sachs are not actually moved by a sense of “social purpose”; they are moved by money. Don’t take my word for it. When the reporter asked if it were possible for bankers to make too much money, especially a year after the financial crisis, Blankfein replied, “Is it possible to be too successful?” He continued, “I don’t want to put a cap on their ambition. It’s hard for me to argue for a cap on their compensation.”

The innocent among us might ask why ambition should be limited to money, why Blankfein does not instead appeal to the public spiritedness of Goldmanites, given that he highlighted the “social purpose” of their employer. The answer is that it wouldn’t work—at least he believes it wouldn’t work—and if it did, it would be at odds with the moral mechanism of Adam Smith’s invisible hand, which sees one only intend to serve himself while still promoting “an end which was no part of his intention,” namely, the public good. 

And hence the grin when Blankfein, a banker’s banker, says he’s “doing God’s work.”

Gekko also grins. At the very end of his “greed is good” speech, when he returns to his seat amid the enamored applause of shareholders, he flashes Fox a grin as if to say, “Did you hear what I was just slinging?” Does the look mean that Gekko doesn’t believe what he said about greed, or merely that he can’t believe he got away with it? It’s hard to tell, but the grin certainly acknowledges the titillating logic of the invisible hand, which depends on separating the ethical upshot of primary aims from secondary effects. The common good comes about not because of the express intentions of commercial agents, but despite them. 

Such a mechanism is morally confusing and may be likened to a rabid dog that takes a chunk out of our thigh, removing a malignant mole in the process. On balance, we might be grateful for the hound’s service, but that wouldn’t keep us from putting him down. The bite still hurts, and we know he had no intention of preventing skin cancer.

This is the challenge of “greed is good” logic, especially in its most extreme incarnations, for it forces us to weigh broader material benefits against the consequences of behavior that is inhospitable, unseemly, and even occasionally dangerous. 

It’s a worthy struggle, as Gekko’s grin acknowledges, and it’s a shame that so many young people who love Wall Street seem to miss it. Screenwriter Weiser says he meets them all the time. “‘The movie changed my life,’” he says, describing the response he so often gets when he tells someone his connection to the film. “‘I wanted to be like Gordon Gekko.’” As Weiser wrote in the Los Angeles Times in 2008, such exchanges make for strange and morally discomfiting moments: “The flattery is disarming and ego-stoking, but then neurons fire and alarm bells go off. ‘You have succeeded with this movie, but you’ve also failed. You gave these people hope to become greater asses than they may already be.’”

Among the fears that should guide one’s behavior, that of being an ass is a pretty good one, as is the concern that a credo that seems so morally convenient—greed is good—might actually involve serious trade-offs that implicate the integrity of one’s character. Thirty years after the movie was first released, a tribute to the power of Wall Street is that this simple insight is so often overlooked. F. Scott Fitzgerald famously said that “the test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.” One can embrace the irony of the invisible hand, and Gordon Gekko’s grin, while still abiding a second voice: Yes, greed is good, but can’t we do better?

John Paul Rollert is adjunct assistant professor of behavioral science at Chicago Booth.