Tuesday, July 24, 2012

Corporate Greed? What about "Worker Greed"

We hear all the time about “corporate greed.” Do a Google search for that term and you’ll find more than 2 million results. But we almost never hear about “worker greed” (only 3,390 results) or “consumer greed“ (50,500 results). Here’s an excerpt from a Boston Globe story from 2009 about firefighter "pension spiking" that clearly illustrates an example of excessive “worker greed”:
Nearly 30 Boston firefighters with pending disability claims filed for retirement yesterday, just two days before a new state law ends a controversial benefit that allows them to significantly enhance their pensions if they claim career-ending injuries occurred while filling in for a superior at a higher pay grade. 

Of the 29 who filed yesterday, 25 said they were filling in for a superior at the time of their injuries, according to city officials, which makes them eligible for a pension benefit at the higher salary scale. That perk, which can add hundreds of thousands of dollars over a retiree’s lifetime and cost taxpayers millions, will not be available to anyone filing after today. 

“This is highly unusual,’’ said Kathleen Kiely-Becchetti, executive director of the Boston Retirement Board, of the number of firefighters who filed for retirement yesterday while their disability claims were still pending. 

The race to file yesterday is the first obvious reaction to the sweeping pension law that was passed by the Legislature and signed by Governor Deval Patrick earlier this month. The claims filed by the firefighters yesterday – and an expected rash of new claims today – could cost Boston taxpayers millions in additional payouts at a time of major budget constraints, fire officials said. 

Boston Fire Commissioner Roderick J. Fraser Jr. said firefighters are clearly taking advantage of the final days before the new clampdown on enhanced pensions goes into effect. 

“The old system provided a financial incentive for people to file for accidental disability while they were filling in for supervisors,’’ he said. “This illustrates that fact.’’ 

Suspected disability retirement abuses and pension excesses have been a chronic problem at the Boston Fire Department, prompting an inquiry by the FBI. 

A Globe review of city retirement and payroll records last year found that, over the prior six years, 102 Boston firefighters had substantially enhanced their tax-free disability pensions by claiming career-ending injuries while they were filling in for superiors at higher pay grades. Some firefighters have sought the enhanced benefit after filling in for a superior for just one day, leading critics to call it the “king-for-a-day’’ provision. 
MP: Corporate managers and business owners don’t have a monopoly on greed, and consumers and workers don’t have a monopoly on virtue. In their role as consumers and workers, individuals can be just as ruthless, cut-throat, and greedy as some corporate executives, like in the case of the extremely unethical, self-centered behavior of the Boston firefighters described above.

49 Comments:

At 7/24/2012 8:45 AM, Blogger Jon Murphy said...

If anti-trust laws are created to stop corporate greed, they should also be used to stop employee and consumer greed. After all, it is only progressive.

So, this is what I propose to ensure a "fair" market place:

Since firms cannot collude on price, neither can workers. Workers are hereby forbidden from discussing their salaries with one another. Since firms cannot form cartels, neither can employees. Workers are hereby forbidden from unionizing.

On the consumer side, consumers are hereby forbidden from discussing prices with one another. Additionally, consumer boycotts of goods are illegal as it is cartelization.

Only by these methods can we achieve the Progressive free market.

 
At 7/24/2012 8:49 AM, Blogger Jon Murphy said...

By the way, I am being sarcastic. I obviously don't support any of the above ideas.

 
At 7/24/2012 8:51 AM, Blogger Moe said...

Hang on: I thought "greed was good".....?

 
At 7/24/2012 9:00 AM, Blogger Methinks said...

Right on, Mark Perry!

 
At 7/24/2012 9:10 AM, Blogger Broll The American said...

Given this clause was in the previously negotiated and ratified contract, why is it "extremely unethical" or "self-centered" of the Boston firefighters? It's no different than a billionaire working advantageous tax loopholes for themselves. Everyone is out for themselves... when the rich do it, they're somehow efficient "job creators"... when workers do it they're "greedy"? The state should have never allowed that clause into the contract in the first place.

 
At 7/24/2012 9:16 AM, Blogger Jon Murphy said...

The state should have never allowed that clause into the contract in the first place.

The firefighter union in Massachusetts is extremely powerful. Anyone who is endorsed by them gets elected. Anyone who fights them finds themselves out of a job real fast.

 
At 7/24/2012 9:29 AM, Blogger Jon Murphy said...

Hang on: I thought "greed was good".....?

Well, that's not really the point, now is it? So much of the popular narrative is "corporations are evil, greedy, faceless" and "consumers/public servants are kindly, meek, and kiss babies." Having legislation that unfairly punishes one group while, at the same time, encourages the same behavior in other groups is bad. Modern legislation gives consumers/unions the ability to exploit corporations, which can lead to contracts like this one. If you are going to have "anti-greed" legislation, have it apply to everyone, not just the unpopular groups. Otherwise, it is a savage hyprocracy.

 
At 7/24/2012 9:40 AM, Blogger morganovich said...

"The state should have never allowed that clause into the contract in the first place."

allowed?

by whom?

the firefighters take public money, give it to their union, who gives it to politicians in exchange for their votes for outlandish contracts.

it's a circular flow of cash that owuld be illegal in the private sector.

imagine paying your boss $20k in exchange for him giving you a $50k raise paid with shareholder money.

you'd go to jail for that.

but if you are a public union and the recipient is a politician, well, then that's fine.

 
At 7/24/2012 9:47 AM, Blogger Che is dead said...

There is a key difference between "corporate greed" and "worker greed". If a corporation is being "greedy" one can always choose to work or do business elsewhere. In the case of public workers, like the Boston firefighters, their greed comes at our expense without recourse to competing entities. That's also the case with private sector unions which, in effect, deny the businesses that they infest recourse to competition.

 
At 7/24/2012 9:49 AM, Blogger Moe said...

Jon,
Can you answer my question?

 
At 7/24/2012 9:52 AM, Blogger Jon Murphy said...

Can you answer my question?

Yes I can.

 
At 7/24/2012 10:01 AM, Blogger Broll The American said...

@morganovich - Its no different than large corporations or the uber rich with their Super Pac dollars funding the campaigns of those same politicians. Goose and gander.... good for both, no? Politicians decide early on which devil they'll do a deal with –Corporate or union interests.

 
At 7/24/2012 10:10 AM, Blogger Jon Murphy said...

Politicians decide early on which devil they'll do a deal with –Corporate or union interests.

Which is why it is so very important we prevent the government from doing so. By limiting government influence in business to the absolute necessities, we prevent rent-seeking by both corporations and unions.

 
At 7/24/2012 10:12 AM, Blogger Moe said...

BTW: I agree that the firefighters here are greedy. This post fits in perfectly with the definition of greed I grew up with. I'm simply trying to reconcile it with the Sowell post's definition.

As you stated about legislation; Having one definition of greed that punishes one group while, at the same time, having another definition that encourages the same behavior in other groups is hypocritical.

 
At 7/24/2012 10:20 AM, Blogger Jon Murphy said...

I'm simply trying to reconcile it with the Sowell post's definition.

To which Sowell post are you referring?


Anyway, to answer your question: greed is something of an amorphous term. The whole "Greed is good" thing comes from Oliver Stone's movie "Wall Street." Most economists don't talk that way. Generally speaking, we prefer the term "self-interest." However, the layman sees the two terms as one and the same, so it's been kind of taken that way.

Self-interest is good. It's when you use coercive means (either breaking the law or forming new laws) to increase your power/money/business that it becomes greed.

 
At 7/24/2012 10:34 AM, Blogger Broll The American said...

@Jon Murphy - Who "limits" the government "influence?" Government is a product of influence. Influence is money. Whoever has the money has the influence and creates the government that suits them best. Even if that government should be smaller in the name of economic "freedom" or entrepreneurship, it will be sure to be done in a way to be advantageous to one group at the cost of another.

 
At 7/24/2012 10:43 AM, Blogger Jon Murphy said...

Who "limits" the government "influence?"

That's why we have a Constitution.

Even if that government should be smaller in the name of economic "freedom" or entrepreneurship, it will be sure to be done in a way to be advantageous to one group at the cost of another.

That's very likely. Which is why a small government is so important. When you have a big government, which control over many aspects of social and economic life, corruption can spread rapidly. Conversely, if the government has very limited power to intrude on people social and economic lives, the corruption is contained.

Governments are self-interested creations, just like companies, corporations, and folks like you and I. Because of that, governments will work only for its own benefit. We want to limit the influence of corporations in our daily lives (we would want Johnson & Johnson forcing us to buy their products) because of their self-interest. Why should the government be any different?

If anything, government self-interest should be treated with greater disdain then business self-interest. A business cannot compel anyone to purchase its products; A government can.

So, what we are ultimately talking about when we discuss limiting government is limiting corruption. You may object and say "well, big government can work if we have the right people in charge!" All due respect, I don't like to rely on a plan that requires "the right people", because the wrong people oh so often are picked.

 
At 7/24/2012 10:45 AM, Blogger Buddy R Pacifico said...

" Some firefighters have sought the enhanced benefit after filling in for a superior for just one day, leading critics to call it the “king-for-a-day’’ provision."

Firefighters are understanably a tight knit group. I would guess that everyone at the station has the assured opportunity to fill-in for a superior early in their career.

Taxpayers would seem assured to be paying for many royal pensions.

BTW, I think first responders should be well paid and insured, but not assured richness via pensions.

 
At 7/24/2012 10:46 AM, Blogger morganovich said...

"Who "limits" the government "influence?""

theoretically, it is limited by the constitution, in particular by the inalienable rights of the individual.

the federal government in particular is specifically limited to enumerated powers.

in practice, this notion has been treated with enormous contempt from about FDR (who threatened to pack the supreme court to get what he wanted) on and, as a result, we have lost such protections and seen the federal government grow from 2% of gdp under coolidge to the behemoth we have today.

the only way to take the influence you fear out of government is to take such influence AWAY from government.

don't let them tax much. don't let them pick winners and losers. privatize most functions.

this is not some wild idea. we used to do this. we used to have a truly small government that intruded far less into our lives.

if we give the government the power to pass out goodies, then there is enormous incentive to capture that government to get the goodie bag pointed your way.

if we take that away, the incentive goes with it.

 
At 7/24/2012 10:52 AM, Blogger morganovich said...

"We want to limit the influence of corporations in our daily lives (we would want Johnson & Johnson forcing us to buy their products) because of their self-interest. Why should the government be any different?"

i think this is a really key distinction.

J+J cannot force us to buy their products. they can only attempt to offer us attractive deals.

the government IS force. that is its very nature. they can force you to do all manner of things.

this is why government is so much more to be feared than an private actor.

"Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master."

george washington

 
At 7/24/2012 10:53 AM, Blogger Scott Drum said...

Claiming career-ending injuries while they were filling in for superiors at higher pay grades is not "greed", it's "fraud".

 
At 7/24/2012 10:54 AM, Blogger Jon Murphy said...

Claiming career-ending injuries while they were filling in for superiors at higher pay grades is not "greed", it's "fraud".

Also yes.

 
At 7/24/2012 10:58 AM, Blogger Jon Murphy said...

ALthough, before we get too far off track, I do want to say just one thing:

This kind of behavior is fairly rare (at least in Mass). The vast majority of firefighters are good, upstanding people who do their job without complaint. Many of them are volunteers who leave their warm beds at night to battle hot fires. Some even die in the line of duty saving lives and property. These are good men.

However, this does go to show my corruption point: a few bad apples were able to use the concentrated power in Massachusetts to line their own pockets. If government were indeed limited, their actions would be much less costly.

You don't need "bad" people to outnumber "good" people for bad things to happen. You just need concentrated power.

 
At 7/24/2012 11:28 AM, Blogger Buddy R Pacifico said...

Google Trend for pensions has fallen steadily for many years.

 
At 7/24/2012 12:15 PM, Blogger Moe said...

Jon,

The definition of greed is not "amorphous".

I'm confident if you take a hundred people off the street and ask them to define it, you'll find a pretty consistent take on the word. The Bible and Merriam Webster have had the same definition for some time now.

 
At 7/24/2012 12:33 PM, Blogger Jon Murphy said...

I'm confident if you take a hundred people off the street and ask them to define it, you'll find a pretty consistent take on the word. The Bible and Merriam Webster have had the same definition for some time now.

I don't know. If we asked your 100 people "Are companies who make a profit greedy?" I bet they'd say "no." If we then ask "Is Wal-Mart greedy?" I bet they'd say yes. Why would that be? Wal-Mart makes pennies on the dollar. They have razor thin profit margins (3.3%, or for every dollar they earn, they only keep $0.03). When we get into the nitty gritty, I think you'll find people's definitions of greed vary wildly and often coincide with their personal beliefs.

 
At 7/24/2012 12:38 PM, Blogger Jon Murphy said...

But then again, Moe, maybe you are right. Maybe their definitions are the same, but how they view it is different.

 
At 7/24/2012 1:20 PM, Blogger Moe said...

I'll respectfully disagree. I think the definition of greed (no context given) would be nearly unanimous.

 
At 7/24/2012 2:23 PM, Blogger Jon Murphy said...

I think the definition of greed (no context given) would be nearly unanimous.

I can agree to that

 
At 7/24/2012 3:26 PM, Blogger Jet Beagle said...

moe: " I think the definition of greed (no context given) would be nearly unanimous."

Perhaps, but the definition of greed is meaningless without context. From merriam-Webster online:

greed - selfish and excessive desire for more of something (as money) than is needed

I don't believe you would get unanimous agreement about what is excessive desire or about how much money a person needs.

 
At 7/24/2012 3:30 PM, Blogger morganovich said...

it's difficult to come up with a more subjective term than "excessive".

i'm with jet on that.

was my drinking in college excessive? i suppose it would depend on who you asked.

(seemed fine to me)

 
At 7/24/2012 3:39 PM, Blogger Jet Beagle said...

moe: "The Bible and Merriam Webster have had the same definition for some time now."

Please, sir. Where in the Christian Bible did you find the definition of the word "greed"?

Perhaps you mean:

"Luke 12:15, "And he said unto them, Take heed, and beware of covetousness: for a man's life consisteth not in the abundance of the things which he possesseth."

But "covetousness" is a far more restrictive word than is implied by the Merriam-Webster definition I just provided.

Perhaps you mean,

"Hebrews 13:5 "Keep your lives free from the love of money and be content with what you have, because God has said,
“Never will I leave you;
never will I forsake you.”


"Being content with what you have" is far, far different from the words "selfish and excessive desire".

Please show me which Bible passages you believe are so consistent with the Merriam-Webster definition.

 
At 7/24/2012 3:51 PM, Blogger Moe said...

Jet,

Since you have your Bible open; try

Proverbs 15:27
Proverbs 18:1
Isaiah 57:17
Proverbs 28:25
Proverbs 23:6
Jeremiah 6:13
Jeremiah 8:10
Ezekiel 16:27
Matthew 23:25
Mark 7:21-23
Luke 12:15
Romans 1:29
1 Corinthians 5:10
1 Peter 5:2
2 Peter 2:3
Ephesians 5:5
2 Peter 2:14
1 Corinthians 5:11

 
At 7/24/2012 3:53 PM, Blogger Jon Murphy said...

Jet-

We could also define "greed" as St. Thomas Aquinas, St. Augustine, and (later) Dante Alighieri defined it: the unpure love.

Whereas pure love comes from the love of God (quest for knowledge to better understand God, for example, or the love of a significant other), unpure love comes from the love of self (quest for knowledge to dominate others or lust for a woman). Whereas pure love nurtures and helps support the soul and divine spark, unpure love diminishes the soul and dims the spark. Whereas pure love is the path to Salvation, unpure love leads to damnation.

 
At 7/24/2012 4:02 PM, Blogger Jon Murphy said...

Brace yourselves: Everyone on this blog is about to become a Biblical scholar.

 
At 7/24/2012 4:08 PM, Blogger Jet Beagle said...

Oh, please, Moe! None of those definitions match the Merriam-Webster definition.

Proverbs 15:27 "The greedy bring ruin to their households,
but the one who hates bribes will live."


There is no definition of the word "greed" in Proverbs 15:27.

Proverbs 18:1 "An unfriendly man pursues selfish ends; he defies all sound judgment."

Is that what you believe the word "greed" means? Someone who pursues "selfish ends".

Isiah 57:17 "I was enraged by his sinful greed; I punished him, and hid my face in anger, yet he kept on in his willful ways."

There is nothing in that passage which defines what is meant by "sinful greed".

I don't think you have any idea where in the Bible the word "greed" is defined. All you did was find 20 or so passages which contained the word "greed". And those passages are not all in the same context.

 
At 7/24/2012 4:13 PM, Blogger Jet Beagle said...

jon murphy,

All I want Moe to do is back up his claim that current usage of the word "greed" - as expressed in the Merriam-Webster definition - is found anywhere in the Christian Bible.

The problem, of course, is that all definitions of the word contain other words which are open to interpretation - words such as "excessive" or "sinful".

 
At 7/24/2012 4:18 PM, Blogger PeakTrader said...

Business owners should be more greedy than their workers, because they have more to lose, and workers should appreciate their business owners more, because they wouldn't have jobs without them.

I'm sure, many heard of employee appreciation day (given by employers). What about employer appreciation day (given by employees)?

 
At 7/24/2012 5:38 PM, Blogger Jon Murphy said...

All I want Moe to do is back up his claim that current usage of the word "greed" - as expressed in the Merriam-Webster definition - is found anywhere in the Christian Bible.

No, I know. I just found it interesting how quickly this thread turned into a religious discussion.

 
At 7/24/2012 11:31 PM, Blogger Hydra said...

Maybe the difference is that worker greed isn't much of a problem.

 
At 7/24/2012 11:41 PM, Blogger Hydra said...

If employees are prohibited from discusssing salaries, that would including ceo's that sit omni interlocking boards. And if employees are prohibited from organizing as unioions, employers should be prohibited from organizing as corporations: every man for himself. Whatchamacallit how fast CEO salaries fall under that plan.

How is the free market supposed to work if employees are prohibited from discovering the true price for their labor?

 
At 7/25/2012 12:21 AM, Blogger juandos said...

"If employees are prohibited from discusssing salaries..."...

If the moon was made of green cheese we might not have a rodent problem on planet earth...

You know hydra as long as said discussiions don't happen on company time, company property, or the use of company communications facilities there's really not much the company can do to stop a discussion...

 
At 7/25/2012 6:14 AM, Blogger Jon Murphy said...

If employees are prohibited from discusssing salaries...

Which is why the suggestion was sarcastic. It shows how really stupid and anti-productive anti-trust laws are.

 
At 7/25/2012 7:16 AM, Blogger Moe said...

Jet
Use your brain a little

 
At 7/25/2012 9:56 AM, Blogger Hydra said...

Workers are hereby forbidden from discussing their salaries with one another. Since firms cannot form cartels, neither can employees. Workers are hereby forbidden from unionizing.

================================

Hey, Murphy brought this up. I was just agreeing with him. Since there is little the company can do about discussions off site, it would be OK for employees to create a union, No?

 
At 7/25/2012 10:06 AM, Blogger Jon Murphy said...

Since there is little the company can do about discussions off site, it would be OK for employees to create a union, No?

Nope. All forms of collusion among workers are forbidden.

 
At 7/25/2012 11:34 AM, Blogger juandos said...

methinks says: "Right on, Mark Perry!"...

Hey methinks, just out of curiosity have you seen the following from Investors Business Daily? If so what's your opinion?

Perspectives Of A Russian Immigrant

It has 17 parts...

 
At 7/25/2012 1:09 PM, Blogger givemefreedom said...

juandos,

Great link to Investors Business Daily. I particularly like the quote: "if capitalism runs on greed then socialism runs on envy!"

 
At 7/25/2012 1:13 PM, Blogger juandos said...

' I particularly like the quote: "if capitalism runs on greed then socialism runs on envy!"'...

Yeah givemefreedom, nothing like the cold water splash perspective of an 'outsider' to make one take another self assessment...

 

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