America has become ruled by love of gain greater than a love of wisdom.
Detroit’s failure teaches us a lesson about the love of gain and the common good. The folly of an excessive love of gain, either through the desire for more profits or political success, has finally been revealed. In the financial sector, where the love of gain is mainly about profits made on the financial markets, the main players have succeeded. They have kept their fortunes, avoided prison, and continue to run their firms. In the political arena, in particular local government, the same pattern has been repeated. Politicians have promised and the organisations that demanded the promises are no longer around to face the consequences, but they benefitted from the political love of gain. In both cases, Wall Street and City Hall, the cost has been America’s common good. We see scandal (Lehman Brothers) upon scandal (LIBOR Fixing) within Wall Street and we see political mismanagement allowed to fester for years, or even decades within City Halls. In the past, the two were not connected. Failure in one did not usually affect on the other. Today, that has changed. The love of gain that infects Wall Street now infuses City Hall and has seeped into the American ethos. America is a country where private interests are to be satisfied no matter the consequence for the future so long as it can be made to be someone else’s problem. America no longer has a common good.
The death of the common good is an Inside Job.
In his film, The Inside Job, Charles Ferguson tried to explain “the systemic corruption of the United States by the financial services industry and the consequences of that systemic corruption.” He succeeded in part, but his final lesson was not pleasant. If you are big enough, financially or politically, you can exploit the common good and force the public good to pay for your private appetites. However, this article is neither a movie review nor a complaint about capitalism. Instead, it is about how Detroit’s decline reflects a crisis within the American regime concerning a love of gain. Detroit and other municipalities face a diminished future because Americans are no longer educated, or habituated, to think of the common good. Politicians work on the belief that as long as they can make the problem someone else’s they can succeed. Tomorrow’s prosperity will pay for today’s promises. There is no need to think of the common good except for what can win an election. To govern is to choose. What America politicians of both parties have done is choose to sacrifice the common good for their success and the success of their respective party. They have refused to educate the public, the electorate, to the consequences of what they have done. At the same time, the education system has taught the public that such choices can always be made into someone else’s problems. Our schools, our universities, and our political institutions have taught us that the public good can sustain our private appetites. Our education system, in particular the universities have failed to educate their students to pursue glory over personal gain. We are no longer taught, and our political institutions no longer expect, to speak of the common good.
The financial crisis and Detroit’s death need a political philosophical context to be understood. Plato’s dialogue, Hipparchus, Or the Profiteer, offers an insight. We need to stop being indignant or trying to assign blame. We need to see the deeper truth about the American regime that connects the love of gain that drives the pursuit of money (needed for prosperity or economic health of the regime) and the love of gain that drives the pursuit of wisdom (needed for the political health of the regime). The two loves of gain are connected. Today, though, they are disconnected. Plato’s dialogue helps us see that what Wall Street pursues as a gain is a low but solid goal. What America has lost sight is the higher form of gain connected to political wisdom and the common good. They can be distinguished by the ends they serve. In America the love of gain has become distorted so the regime is in danger. Yet, what is the source of the crisis?
“The regime is only in trouble to the extent that our young are educated to pursue gain as love of money, a lower form of safety and comfort, rather than higher, noble, goals in public service.”
Educated to immoderation: the young have come of age on Wall Street and in City Hall.
The regime is in trouble to the extent that its young are educated to pursue gain as love of money. They are taught that the highest gain is safety in the form of comfort and wealth. Even today being a celebrity is the highest goal that the young may aspire to have. The low goals crowd out any higher or nobler goals such as public service or glory associated with an increased common good. The education system has failed because the universities no longer teach about the common good. It now encourages our best and brightest to go to Wall Street and Washington to pursue private gain instead of the common good. When the young are uneducated about the good or noble the republic cannot be sustained. They have been educated to a low but solid goal: the pursuit of profit to achieve safety, comfort and celebrity. In themselves, these goals are not a problem. They have become a problem because they have replaced the higher goals that would serve the public good. We have been taught that the public good is best served by our pursuit of private goods.
The academy is now a company.
The education system is distorted by this crude pursuit of gain as corporate sponsors are prevalent within all universities. The university has become another corporation. The academic commitment to pursue knowledge is now dwarfed by the commitment to pursue corporate sponsors. Academia’s resistance to power either political or economic is weaker than it has been in the last 2500 years including Heidegger’s Rectoral Address and Plato’s Seventh Epistle. The pursuit of knowledge and truth has become the handmaiden to the pursuit of financial gain. Some schools pursue sports championships, others pursue corporate sponsorships and both distort its role to educate the young. The universities may need the money, but that raises the question of why so much money is now needed to fund a university. The money is there to attract scholars and students. Yet, this only shows us how far the university has become a social experience and job training rather than a place that will shape the student’s souls.
American universities have failed in their core responsibility as universities. The young are no longer taught to pursue noble goods. They have failed to shape the souls of students to seek a higher good. Instead, they have succumbed to the basest of goals, financial gain. The problem is not that this is a few teachers who have fallen astray. There are teachers who try to resist being seduced by money. However, they remain a minority. In most cases, their presence is a salve for the university’s soul. After each financial scandal and crisis, we see the MBA schools institute a new set of ethics courses. What we find is that the students with stunted souls that Bloom worried about in his book The Closing of the American Mind have grown up, gotten a job, and gone to Wall Street and Washington.
Students have been left empty of the noble and the good. Their souls are only shaped by a love of gain understood as safety, comfort and personal pleasure. The brightest minds are attracted to money, status, and celebrity rather than duty, service, and glory. The students have been seduced, because their teachers have been corrupted by the tyrannical love of gain. They too have taught an immoderate pursuit of profit without regard to the public consequences. What is the result of this flawed teaching? The students of this teaching are now in position of power and influence. Detroit’s failure was not an isolated occurrence nor was it the failings of an individual. Instead, it reflected generations and their approach to the common good across America.
The pursuit of profit has become America’s ethos.
The pursuit of profit and private good is nothing new to Wall Street. Wall Street and America have changed. The pursuit of gain has always existed, but it remained relatively contained and directed to goals that were politically good for the regime. The love of gain has become unchained and is no longer connected to political wisdom. The pursuit of profit has become shockingly immoderate even for Wall Street or Washington. There is no issue that cannot be brazened out or turned into a profit. There is no financial deal too big. There is no profit too large. There is no target too vulnerable to approach. There is no financial instrument too complex to pursue. All of these are pursued for their own sake without any thought or immediate link to the good that they are supposed to serve. One can see the immoderate ethos expressed in the use of Collateral Debt Obligations (CDOs). We can see this with the municipal bond scandal where the traders understood that the small percentage change for their profit would have a long term disproportionate effect on local government finance. We can see it in claims to sell subprime bonds to “widows and orphans”. The instruments were designed on Wall Street for Wall Street and abetted by Washington to deal with the risk and protect the profits and gains.
The Hipparchus shows us how America’s flawed love of gain undermines the common good.
In his analysis in the Hipparchus, Bloom reveals the underlying reason for such instruments and why politicians have embraced them. Wall Street and City Hall share the same desire to avoid risk and enjoy the same love of gain. The financial instruments and the political instruments create something, in the case of financial trades a compact between financial houses to avoid suffering loss (an injustice). Both parties involved do not believe in justice (explaining the risks). The various financial instruments give a decent veneer to what could be called plainly a swindle. In political terms, the same instrument can be seen in the promises made to workers regarding pensions, health care, and employee benefits. On Wall Street and in City Hall the parties were not involved to gain for the common good or to show their clients the best gain and how it was achieved. Instead, the instruments were designed to avoid losses for Wall Street or City Hall. Wall Street and City Hall insulated themselves from loss by making it someone else’s problem. They knew someone, preferably someone else, would have to take the loss (suffer the injustice) but they did not care as long as it was not them. In Detroit and other municipalities, the same ethos exists. In America it dominates our politics as President, Senator, and Congressman look to make it someone else’s problem preferably in the future. If you believe you can always make it someone else’s problem, then the common good is dead.
As Montesquieu warned, Republics fail when they become gorged on luxury and consumption in which status is related to celebrity and measured by wealth.
The problem is within the American regime where the republic principles have been undermined by the indecent love of gain. What we see is that the definition of happiness has been corrupted because the love of gain has become an end in itself. The higher end of virtue or the health of the regime has been lost because gain no longer corresponds to it.
We need to do more than protect Main Street from Wall Street’s excesses through increased regulation. Such an approach treats the symptom. Americans need to reconsider how they became ruled by love of gain. How have they lost sight of the love of wisdom and the love of wisdom best practiced by political men has become another technique to make the common good someone else’s problem? If American cannot find political men who have been taught or been instilled with a love of wisdom (good gain) over gain simply, it will fail. To reverse the crisis we need reform within ourselves, our families, and our communities. The economic reforms are occurring though these will only be sustained if there is reform within the people and more generally within the regime. However, neither of these is sustainable unless the education system is reformed.
Is such a change possible?
Detroit’s failure shows that most states and municipalities have made promises on city employment contracts, health benefits, and pensions that cannot be met without higher taxes or losses for the bond markets. The promises show the belief in gain over political wisdom is endemic. Our politicians made promises, often abetted and supported by financiers, and organisations made demands that could not be met. They both believed it was ok as long as they could make it someone else’s problem. America has to accept that it can no longer make it someone else’s problem. America faces the danger that Abraham Lincoln warned would emerge over 200 years ago.
At what point, then, is the approach of danger to be expected? I answer, If it ever reach us it must spring up amongst us; it cannot come from abroad. If destruction be our lot we must ourselves be its author and finisher. As a nation of freemen we must live through all time, or die by suicide.
We now face our reckoning. We can reform our financial and political systems which would reform the regime, or we can continue to try to make it someone else’s problem. If America wants to remain an experiment in self-government, it must solve its own problem. Do we want to be satisfied slaves, or responsible citizens? We cannot survive if we make that choice someone else’s problem. If we cannot or will not undertake the difficult task of self-government, then someone else will solve our problem and they will rule us.
 One should also note that the promises made for Social Security have also come due. They can no longer be made someone else’s problem, which has been the goal of every politician since the programme began. On the issue of social security reform consider this introductory article.
 Thomas L. Pangle, (1987), The roots of political philosophy: ten forgotten Socratic dialogues, page 78. Cornell University Press. My analysis follows Bloom’s. I also relied on Jason A. Tipton’s Love of Gain, Philosophy and Tyranny: A Commentary on Plato’s Hipparchus Vol. 26/2 (Winter 1999) Interpretation: A Journal of Political Philosophy
 Two interesting exceptions to this rule have been George Bush’s attempts to reform social security and Chuck Reed (mayor of San Jose) who wants to address the pensions issue.
- Trust in Leaders, Sense of Belonging Stir People to Safeguard Common Goods, Analysis Shows (psychologicalscience.org)
- Why do we have the NSA and why do we need surveillance: A response to Greenwald and others. (lawrenceserewicz.wordpress.com)
- Trust in leaders, sense of belonging stir people to safeguard common goods (scienceblog.com)
- Economy of the Common Good: Hippie visionaries or modern corporate responsibility? (womenscareerpost.com)
- The Good of Rule (sancrucensis.wordpress.com)
- CJR Says Fiscal Cliff is a CNBC Scam (ritholtz.com)
Very interesting thank you.
From my perspective, the change in America came in the difference between JFK “And so, my fellow Americans: ask not what your country can do for you–ask what you can do for your country.” and Gordon Gekko’s “Greed is Good”.
Kennedy had a vision of the young volunteering to change a country for the better, to improve the life of their fellow citizens, to devote themselves to the betterment of their community and the world as a whole. For if you cannot improve your own country, what makes you believe that you can improve the lives of foreigners? How can you hold America up as the beacon of light if many of its citizens live in abject poverty?
Even though he was fictional, Gordon Gekko’s “Greed is Good” (actually “Greed, for lack of a better word, is good”) became the mantra of the eighties. Any thoughts of improving the common good became synonymous with socialism, which was akin to communism, the evil enemy of capitalist America. Students were encouraged to embrace greed to drive the economic miracle. In the pursuit of profit, they put aside any ethical or moral considerations about their actions. They became sociopathic economic animals, devoid of any morals. This drive for the pursuit of profit even put aside any obligations to comply with the law. Hence the growth of Ponzi schemes, insider trading and junk bonds. No-one cared that you were hurting others, so long as you were not left with the pass the (worthless) parcel when the music stopped!
For strategic reasons, America has been driving to become self-sufficient in oil from the Western Hemisphere due to the middle east on the cusp of a war. The United States might even be able to export oil in the near future to pay off some of the Chinese debt. It seems that America has been treating the Chinese debt as something that can be put off until tomorrow. If the Chinese consumer boom continues, then maybe America has a market to sell into. In the meanwhile, Detroit is not the only municipality that will end up being bailed out by Federal money and the creditors. Even the UK may take a hit from Detroit, as I’m aware that some of the loan notes were held by British banks. The Federal government needs to impose criminal sanctions on any politician who runs their city or state in a quasi bankrupt position. Virtually every country has a public debt, but you cannot run a city or state on future earnings. You cannot be a modern Mr Micawber:
“Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.”
Thanks for the positive and interesting post. I had developed this piece from an earlier article that relied on the film Money Never Sleeps with reference to Gekko.
I agree on the strategic issues that America faces. What is particularly interesting for me is how the common good stretches beyond one generation. By that I do not mean we are impovershing our grandchildren, I mean we are expected to be taxpayers from 18 to 78 (roughly our life expectancy in the US) so any decisions now are impoverishign us not some future generation. Therein lies the true cost of political decisions based on the illusion that we can make our political problems someone else’s problem. Too often and for too long, Congress and the Senate have been satisfied if they can make it someone else’s problem, such as funding local government, and state governments have fare no better as they have been content to make it someone else’s problem, preferably the federal governmet. In such decisions, there is little or no consideration of the common good. To that extent, I would suggest that Madison’s dream, at least spelled out in Federalst 10 and 51, has failed. Factions may check faction but that does not mean the common good is always served as a result.
Thanks again for reading my post and the positive comments.
Reblogged this on reblogador.
Lawrence, very interesting. When I was young I thought that money had value but now I realise that it is only people that have value. I am not anti-capitalist per se but for me to be rich someone, or more than one, has to be poor.
Thanks for reading and the intersting comment. I hope that I did not give the impression that the common good required someoen to suffer. On the contrary, I think that everyone can benefit from the common good so long as they understand they are working for the common good. By that I mean, you can be wealthy without making someone poor so long as you are not trying to make them poor and you understand what you need to contribute to the common good.
The point I was trying to make is that financiers and politicians had chosen to make promises and deals that they knew could not be financed unless it was someone else’s problem.
The goldman sachs trader who boasted of having sold low quality financial products to widows and orphans knew he was selling something substandard. He was not looking out for the client or for the common good.
The traders who manipulated the interest rates on municipal bonds, used to finance local government infrastructure, understood what they were doing was wrong and would damage the common good. They chose to hurt the common good because it benefit them.
I am not sure that everyone earning a wage automatically requires someone else to be in poverty. However, I accept that putting a value on money over people will have that effect becuase we are people not money.
Thanks again for taking the time to read and offer a positive and interesting comment.
Lawrence, I am agreeing with you. I am concerned that we have been caught in a system where the only value is money rather than compassion, humanity, art or even love perhaps. The point I was trying to make is that with a finite amount of resource if I have more than the average then someone has to have less. The way averages work it takes a lot of poor people to create the super rich.
Good stuff and very stimulating.
Nothing shows the inequality more than in India, where there are now many dozens of dollar Billionaires, whilst the majority live in complete poverty.
Along with the United States, the United Kingdom has annually gifted hundreds of millions in aid to alleviate the suffering of the poorest citizens of India. Just recently, the Indian Government indicated that they no longer needed this donation (even though it was offered for the poor). India, they point out, is a nuclear state. They are constructing SSBN, nuclear submarines with inter-continental ballistic missiles, so if they don’t feed their own poor, then why should some other nation do so and embarrass them?
I fear that in the pursuit of profit with total lack of basic humanity has corrupted other nations to think of individual greed above any thought of helping others.
A recent tweet pointed out that it’s stupid to complain that the world treats you unfairly. It said that it’s silly to think that a Lion would be nice to everyone, when it is biologically programmed to eat you. It suggests that the Law of the Jungle, survival of the fittest rules and that anyone who thinks otherwise is idiotic.
Where has all the humanity gone? The care and concern for our neighbour, which if given would be returned? Are we teaching our children to go out and contribute to society, or do we say that it’s “dog eat dog”, that fame & celebrity (and a hefty wallet) is the be all and end all? What a sad world that would be.
Very interesting and appropriate topic. For me the whole situation in America, UK and most of the rest of the world can be summed up in the line: “For the love of money is the root of all evil”. Notice the evil is not money itself but the love of it that causes the problems. What chance has common good of succeeding if our aim is to acquire even more for ourselves and not to care a jot for our neighbour? We seem to get more pleasure from buying material items which are not always needed than putting food in a starving belly. I suppose we are all a stone in the pyramid of self and greed. Saying that, if I’m in debt and local government is in debt and even national governments are in debt, who is sat on top of this pyramid?
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