I know, cliche to use a movie titled “Wall Street” in a blog post about comparing a film to business ethics. But I couldn’t help but draw the direct ‘shareholder wealth vs stakeholder’ analogy to the 1987 blockbuster hit. The movie portrayed a wall street millionaire/billionaire, corporate-raiding Gordon Gekko, and the journey of a young stock broker named Bud Fox.
Bud Fox desperately wants in the game of wealth, and Gekko acts as a mentor to the young and naive Fox. Gordon Gekko shows Fox the art of generating super wealth, despite teaching him to perform illicit acts such as inside trading. Gordon Gekko publicly preaches that “greed is good,” and argues that one would be naive to think we live in a democracy, but rather a free market. He teaches Bud Fox that ‘getting your hands dirty’ is necessary to survive, compete, and succeed.
Gekko feels no sympathy for the companies he buys and dissolves, leaving so many unemployed. Gordon Gekko sacrifices these stakeholders at the expense of his own personal gain. Here is the scene in which Bud Fox confronts Gekko, after Gekko double-crosses Fox and decides to dissolve the company (BlueStar airlines) his father currently works for, despite promising the Fox family he would buy and expand it.
On a more analytical note, Gordo’s “Greed is Good” motto technically makes sense, especially in a free capitalist market spurred by competition and innovation. In other words, the more selfish the corporations (in terms of shareholder wealth), the more competition is forced to keep up, creating a stronger economy as a whole.
The problem occurs when business ethics are ignored and stakeholders are sacrificed at the expense of wealth. Many would say human rational naturally leans towards greed and wealth, but there will always be those that are stakeholder-first, hence Fox’s motivation to seek revenge on Gekko. Milton Friedman, like Gekko, believed in the ‘invisible hand,’ but also stressed one must STAY WITHIN THE RULES at all costs. Gekko broke the rules, and made many enemies along the way, which ultimately came back to bite him in the ass.