I suspect that for many fans of the movie, Wall Street (1987), Gordon Gekko’s statement that “Greed, for the lack of a better word, is good. Greed is right. Greed works.” is as anticipated as Sigourney Weaver’s line in Aliens (1986) (“Get away from her you bitch!”) or Jack Nicholson’s “You can’t handle the truth!” line from a Few Good Men (1992). While lacking the build-up of the lines uttered by Weaver and Nicholson, Michael Douglas’ delivery of the line had a come out of nowhere effect that gripped me with its crassness and truth. Arguably the “greed is good” line would be great fodder for populists such as U.S. Senator Elizabeth Warren, Democrat of Massachusetts or her fellow adopted New Englander and senator Bernie Sanders, the Democratic Socialist of Vermont.
It was another line, however, more metaphysical in its tone and cerebral that caught my attention: “Money is transferred from one perception to another.” The line took me out of the more solid quantitative world of stock prices, mergers, and profit and placed me in the abstract. While the Gekko character, played very well by Mr Douglas, was a realist, he took me behind the veneer of hard currency and added more insight to my developing view on what money and banking really is.
Money is more than a unit of account, a medium of exchange, or a mechanism for storing wealth. Money serves as a proxy of an individual’s captured energy. The more energy an individual generates, whether via labor or thought, and can be extracted by an employer or tax collector, the greater the value of the individual and the compensation the individual is owed in the market.
Banking is not just about collecting deposits and making loans. Banking is an information search process. Banking facilitates the transfer of captured energy from one perception of economic reality to another perception of economic reality. The information that the “banker” searches for is information that can increase the value of his money; increasing his money’s ability to be transferred to multiple perceived realities. The more realties that money can take you to, the greater your wealth. And the greater the amount of information, the optimal your returns on money. As Gekko shared with his protégé Bud Fox, “The most valuable commodity I know of is information.”
The banker’s search for information is what built America. He was aided by merchants and traders who sought out new markets and in exchange for the banker’s financing shared with the banker information about the opportunities that could increase the value of the banker’s coin. This is where Mr Biden’s narrative is wrong about who built America. Mr Biden, likely as part of his campaign to sway Mr Sanders, Mrs Warren, and their populist supporters, states that America was built by an American middle class versus Wall Street bankers and hedge fund managers. History does not support his assertion. The middle class is, historically, a recent creation, taking root during post World War II. America was the result of the metaphysical where monarchs, merchant traders, and bankers closed their eyes and envisioned how best to exploit a vast land. To paraphrase Gordon Gekko, these men created nothing; they owned.
I doubt if Mr Biden takes this metaphysical view toward the American political economy. Even if he did, he would not share these thoughts with voters who would have to process the thought that their contributions to America’s economic growth was more that of tool than conceiver. Given Mr Biden’s close relationship with the banking industry, however, he should have a pretty good grasp on the reality of the banker’s role in the capitalistic system: that his greed for life and ability to move money from perception to perception, much like Gordon Gekko’s ability, is responsible for America’s growth.