As much as the titans on Wall Street pull in during a year, they still want more. It must be human nature. If so, nature may be at odds with narrowing economic inequality. Even as 2014's compensation figures show such a narrowing, I suspect that such a case is an exception rather than being indicative of a fundamental shift.
The CEOs of the five largest U.S. banks made on average 124
times the average worker at the banks in 2014. The corresponding figure for
2006 is 273 times. The CEOs were not hurting in 2014, however; collectively,
they got $92.5 million ($18.5 million per CEO on average). The collective figure
for 2006 is $173.6 million.[1]
Meanwhile, the banks’ employees saw their compensation rise by 17% to $148,740 from
$127,379. According to The Wall Street
Journal, the increased reserve requirements under the Dodd-Frank Financial
Reform law of 2010 made it costlier for the banks to increase profits by taking
on more debt (i.e., leverage), and the CEO pay suffered accordingly.
Suffering may not be the best term to describe a CEO’s
average pay of roughly $18 million per year. How much of that figure can even a
person awash in luxury spend in a year? Doubtless, a significant amount is
invested. Were I among that elite cadre, I would lean toward investing as much
as I could so that one day I could live comfortably and with security of mind
off the investment income. A job cannot be relied on in perpetuity. Even
investing in just one company (e.g. Enron) or even one industry entails some
risk. Moreover, I would diversify my portfolio internationally with security of
mind foremost in mind.
I mention “security of mind” because the economizing
instinct does not turn off after a certain level of income or wealth has been
achieved because the future is almost by definition uncertain. Put another way,
you never know for sure whether what you have stored away in a savings account
will be enough even for survival needs. So the bank CEOs were probably
scrambling in 2014 to come up with non-leveraged ways of increasing earnings
per share as if $18 million were not enough. This is an instinctual rather than
a rational dynamic although reason does confirm that nothing in the future is
absolutely certain.
Profit-seeking activity and accumulated wealth do not
necessarily indicate the presence of greed, or love of economic gain.[2]
So it is possible to go on with the economizing instinct without necessarily
being greedy. Where the instinct is exaggerated or multiplied into an
obsession, however, love of gain is very likely in the mix. For the 5 CEOs,
reaching the point of being able to live off very well diversified investment
income is quite possible. At that point, whether or not the CEO continues on
with the instinct may give us a sense of whether greed has taken over.
From my own experience, I have struggled with whether to
stockpile too much food in case I ever need it. For instance, I spent Easter
2015 volunteering at a Christian church’s meal for the impoverished and food
pantry. I was selected for heavy labor on the tables since I was the youngest
among the volunteers (which really says something). Before the meal, I could go
through the pantry myself to get some food supplies. Even though the volunteer taking
me through the pantry would not have curtailed my appetite to stockpile, I kept
well within the allotment that anyone would get.[3]
The following day, however, I could have returned to the church and helped
myself to still more, but I asked myself, How
much is enough, really? Sure, I could have used the additional food, but I
could not shake that question, so I did not avail myself of the church’s generously-stocked
outdoor cabinet that was always open; I would not abuse the church’s openness,
which I had seen so little of when I had volunteered at food pantries in my
rather sordid hometown. My point here is that I felt the instinct to stockpile
and I could see its relation to food-security, yet I could not cleft the
presence of the economizing urge from what greed might have been in me at the
time. At any rate, a normative constraint can indeed be efficacious against the
instinct and/or greed, though I don’t think a society can rely on such a check.
That even a Wall Street CEO cannot be absolutely certain
that he or she would not want for necessities ever again leaves open the
possibility that the economizing instinct—being inherently without a limit
(i.e., a maximizing variable)—could still be operating rather than or more so
than love of gain. Distinguishing the motive of self-preservation, which Thomas
Hobbes emphasizes in Leviathan, from
loving economic gain (not to mention taking it as an end in itself) is
difficult. Whether a person seems to be obsessing on getting as much money out
of other people as possible, especially if coupled with a willful disregard for
related harm, however, can be taken as a good indicator of greed.
[1] Peter
Rudegear, “Wall Street’s Pay Gap Slims,” The
Wall Street Journal, April 6, 2015.
[2]
Clement of Alexandria, a theologian in early Christianity, stressed that a
person can be rich and yet cap his or her desire for more at the level of
necessities. Augustine would disagree, and thus place limits on wealth before
it can be taken as being indicative of underlying greed. See Skip Worden, God’s Gold:
Beneath the Shifting Sands of Christian Thought on Profit-Seeking and Wealth,”
ch.s 3 and 4.
[3]
The ham supper was excellent, by the way. Just before the meal, people wanting
food from the pantry were given tote bags with numbers attached, As they were
called during the meal, the individuals would go to the pantry room and quickly
return to their meal. I had the pleasure of sitting with a mix of low-income people
and church members. I was impressed that everyone got into a discussion of the
U.S. Civil War. We even had a confederate! Our table was a microcosm of society
re-integrated. In contrast, the Wall Street CEOs doubtless live in their own
world, and sadly so do most poor people.
