Gold­man Sachs, greed and self-in­ter­est

Self-de­nial is key to keep­ing a han­dle on

The Washington Times Daily - - Metro - By Jay W. Richards and Anne Bradley

On Wed­nes­day, Greg Smith, an ex­ec­u­tive di­rec­tor at Gold­man Sachs, an­nounced his res­ig­na­tion in the pages of the New York Times. His rea­son­ing: The com­pany’s em­ploy­ees and cul­ture have mor­phed into a gross en­tity that side­lines the in­ter­ests of the client in fa­vor of mak­ing a quick buck. By his ac­count, Gold­man Sachs’ cul­ture has be­come “toxic and de­struc­tive.” Mr. Smith no longer wants to be as­so­ci­ated with the Wall Street gi­ant. “Peo­ple who care only about mak­ing money,” he ar­gues, “will not sus­tain this firm — or the trust of its clients — for very much longer.”

With­out tak­ing sides, we can say Mr. Smith’s con­ster­na­tion gets to the im­por­tant and of­ten mis­un­der­stood dif­fer­ence be­tween greed and le­git­i­mate self-in­ter­est.

From a Chris­tian per­spec­tive, greed is not good. Je­sus says, “Be­ware and be on your guard against ev­ery form of greed; for not even when one has abun­dance does his life con­sist of his pos­ses­sions” (Luke 12:15).

Greed (cor­po­rate or not) tra­di­tion­ally has been counted as one of the “seven deadly sins,” an ex­ces­sive de­sire for pos­ses­sions that al­lows us to hurt our­selves and oth­ers. Self-in­ter­est is dif­fer­ent. Ev­ery time you take a breath, eat a meal or brush your teeth, you act in your self-in­ter­est. That’s good, not bad.

Para­dox­i­cally, greed — be­cause it’s spir­i­tu­ally de­struc­tive — is con­trary to your self-in­ter­est, while “self-de­nial,” writes the­olo­gian Art Lind­s­ley, “is in your self-in­ter­est.”

In the Gospel of Mark (8:35-36), Je­sus said: “For who­ever wants to save their life will lose it, but who­ever loses their life for me and for the gospel will save it. What good is it for some­one to gain the whole world, yet for­feit their soul?” Our chief end is to know, glo­rify and en­joy God. If we’re self­ishly fix­ated on our­selves, we miss what we are cre­ated for.

This para­dox­i­cal bib­li­cal prin­ci­ple, that self-de­nial is in our self-in­ter­est, is also an im­por­tant eco­nomic prin­ci­ple. The greedy miser who hoards his wealth closes him­self off to greater eco­nomic gains. And in a free mar­ket, the greedy mer­chant who swin­dles his cus­tomers is not likely to main­tain prof­itabil­ity.

On the other hand, if we seek to meet the needs of oth­ers — whether we are hedge-fund man­agers or plumbers — we are likely to reap per­sonal ben­e­fit. Great en­trepreneurs who risk their wealth, de­lay their grat­i­fi­ca­tion and suc­cess­fully an­tic­i­pate the needs of oth­ers can be­come fab­u­lously suc­cess­ful as a re­sult.

This is the beauty of the free mar­ket: It har­nesses our nar­rower self­in­ter­est for the com­mon good. Mar­kets bring to­gether the most will­ing sup­pli­ers with the most will­ing de­man­ders, and ex­change takes place. You freely pay the gro­cer for gro­ceries, he freely sells them, and you both end up bet­ter off than you were be­fore.

Prof­its and losses are im­por­tant feed­back mech­a­nisms within the mar­ket sys­tem. They act as sig­nal­ing de­vices to let com­pa­nies know whether they are meet­ing the needs of con­sumers. When a com­pany starts to dis­re­gard its cus­tomers, it even­tu­ally will lose them and lose prof­its as a re­sult. At that point, it can do one of two things: Al­ter its cor­po­rate be­hav­ior to try to gain those cus­tomers back or con­tinue on the self­ish path and even­tu­ally shut its doors.

In his res­ig­na­tion op-ed in the New York Times, Greg Smith seems to get this. “Make the client the fo­cal point of your busi­ness again,” he tells Gold­man Sachs ex­ec­u­tives. “With­out clients you will not make money. . . . Weed out the morally bank­rupt peo­ple, no mat­ter how much money they make for the firm.” In busi­ness as in faith, in or­der to gain our life, we first must lose it.


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