Post: #1

I got this link from the Extreme Early Retirement forum. Really interesting take on the mega-rich in America:
http://www.nytimes.com/2014/01/19/opinion/sunday/for-the-love-of-money.html

The article basically talks about how a lot of Wall Street behaviour is simply explained through addiction. People who are addicted to making money will stop at nothing to feed their addiction, even if it's hazardous to the system as a whole. I found it fascinating to read, and it explains also a lot of historical scenarios - the collapse of the western and eastern Roman economies (where a handful of people tried to grab more and more wealth, causing the system to collapse); the ebb and flow of the Chinese dynasties (similar story - as wealth concentrated in the hands of the few, not enough money was available to fund defenses against invasion).

Actually, it's such a simply idea I feel dumb that I didn't think of it. The world makes more sense now that I realise that there is a significant group of people that are addicted to wealth and will stop at nothing to get more.

My favourite extract from the article:

Quote:But in the end, it was actually my absurdly wealthy bosses who helped me see the limitations of unlimited wealth. I was in a meeting with one of them, and a few other traders, and they were talking about the new hedge-fund regulations. Most everyone on Wall Street thought they were a bad idea. “But isn’t it better for the system as a whole?” I asked. The room went quiet, and my boss shot me a withering look. I remember his saying, “I don’t have the brain capacity to think about the system as a whole. All I’m concerned with is how this affects our company.”

I felt as if I’d been punched in the gut. He was afraid of losing money, despite all that he had.

From that moment on, I started to see Wall Street with new eyes. I noticed the vitriol that traders directed at the government for limiting bonuses after the crash. I heard the fury in their voices at the mention of higher taxes. These traders despised anything or anyone that threatened their bonuses. Ever see what a drug addict is like when he’s used up his junk? He’ll do anything — walk 20 miles in the snow, rob a grandma — to get a fix. Wall Street was like that. In the months before bonuses were handed out, the trading floor started to feel like a neighborhood in “The Wire” when the heroin runs out.

I’d always looked enviously at the people who earned more than I did; now, for the first time, I was embarrassed for them, and for me. I made in a single year more than my mom made her whole life. I knew that wasn’t fair; that wasn’t right. Yes, I was sharp, good with numbers. I had marketable talents. But in the end I didn’t really do anything. I was a derivatives trader, and it occurred to me the world would hardly change at all if credit derivatives ceased to exist. Not so nurse practitioners. What had seemed normal now seemed deeply distorted.

Post: #2

Thanks for sharing the article, great read.

Post: #3

Once you reach a certain level of success and you have financial security the only status symbol you have is power. It's the same as women competing with each other over who's prettiest and can get the most male attention. Men compete with each over who's more powerful. It's all ego.

Have you guys ever seen Vanilla Sky with Tom Cruise? He's a spoiled rich kid with a powerful dad who wrote a book on wealth and power. He talked about being on that level and how it's all about "power upheavals".

Post: #4

OP, didn't you write a post recently about how you're increasingly drawn to the idea of retiring from your current profession (I believe you're a physician) and just doing something with your hands instead?

You should consider the close relationship between the feelings that animate such a wish, and your sympathy with the idea of characterizing essentially healthy and vital instincts by the cant phrase "wealth addiction".

In fact, they are two sides of the same coin -- a sense of ultimate futility that is all too easily mistaken, especially by the literary and the intelligent, for a revelation of objective truth.

As far as the actual essay, it's a compendium of blue pill whining and loserdom. This dude managed to make some decent money on Wall Street, and all he can do now is be a fucking ingrate and whine about "addiction". The following passages give a good taste:

Quote:I’d lied my way into the C.S.F.B. internship by omitting my transgressions from my résumé and was determined not to blow what seemed a final chance. The only thing as important to me as that internship was my girlfriend, a starter on the Columbia volleyball team. But even though I was in love with her, when I got drunk I’d sometimes end up with other women.

Three weeks into my internship she wisely dumped me. I don’t like who you’ve become, she said. I couldn’t blame her, but I was so devastated that I couldn’t get out of bed. In desperation, I called a counselor whom I had reluctantly seen a few times before and asked for help.

Quote:Just four years after I started at Bank of America, Citibank offered me a “1.75 by 2” which means $1.75 million per year for two years, and I used it to get a promotion. I started dating a pretty blonde and rented a loft apartment on Bond Street for $6,000 a month.

I felt so important. At 25, I could go to any restaurant in Manhattan — Per Se, Le Bernardin — just by picking up the phone and calling one of my brokers, who ingratiate themselves to traders by entertaining with unlimited expense accounts. I could be second row at the Knicks-Lakers game just by hinting to a broker I might be interested in going. The satisfaction wasn’t just about the money. It was about the power. Because of how smart and successful I was, it was someone else’s job to make me happy.

Still, I was nagged by envy. On a trading desk everyone sits together, from interns to managing directors. When the guy next to you makes $10 million, $1 million or $2 million doesn’t look so sweet. Nonetheless, I was thrilled with my progress.

In short, this guy is an insecure dick and a mangina to boot. And now he projects his personal issues on everybody else and whines in the NY Times about "wealth addiction".

Finally, the answer given him by his boss in the passage quoted in the OP is exactly right. It is indeed literally true that no individual has the brain capacity to try to figure out what's best "for the system as a whole". Far better that people act in their own self interest, which they do know something about, and let the invisible hand do its magic. It is when arrogant intellectuals decide that they know what's best for everyone else that we start getting into real problems.

Post: #5

(01-26-2014 03:00 PM)The Lizard of Oz Wrote:  It is indeed literally true that no individual has the brain capacity to try to figure out what's best "for the system as a whole". Far better that people act in their own self interest, which they do know something about, and let the invisible hand do its magic. It is when arrogant intellectuals decide that they know what's best for everyone else that we start getting into real problems.

The invisible hand is only invisible because it's not actually there. Unchecked, businesses and their owners tend to screw people over left and right.

Post: #6

(01-26-2014 03:00 PM)The Lizard of Oz Wrote:  In short, this guy is an insecure dick and a mangina to boot. And now he projects his personal issues on everybody else and whines in the NY Times about "wealth addiction".

You've spent most of your post attacking both me and the author of the article and doing nothing to address the underlying argument.

That is not how a discussion works.

Post: #7

Thomas,

I certainly did not mean to attack you and I'm sorry if it came off this way.

Like I said, I believe that you are a very intelligent man with a literary sensibility. And I think there is a sense of general futility that can sometimes come over men of this type and predispose them to be sympathetic to certain more abstract notions of futility, such as the one that underlies the ideas of this article. That is why I took the liberty of drawing your attention to what I feel is the relation between your retirement sentiment in the earlier post, and your particular interest in the essay in the OP. But again, if that felt like an attack, then please accept my apologies.

As far as the author of the article goes, I think his own words speak for themselves. The behavior he himself describes is that of an insecure and insufferable boor; but instead of acknowledging his faults for what they are, he lays the blame on "wealth addiction" and thinks nothing of tarring a whole profession -- which has been very kind to him personally -- with the same brush. I see nothing to admire there.

I did not address the underlying argument of the essay because I don't really see one, or rather it strikes me as self-evidently absurd. Did Michael Jordan suffer from "championship addiction" because after he won three championship rings he burned with an equally strong and implacable desire to win one, two, or three more? Did Thomas Edison suffer from "invention addiction" when he kept trying to design more and more new things? Is soup suffering from "player's addiction" because after a great year of pulling pussy all he can think of is how to up his notch count and increase quality at the same time? Well, in the latter case, I'm not so sure...

It is in the nature of any truly ambitious man to try to push his achievement as far as it can go in his chosen sphere. This is not a problem or an "addiction" -- it is the quality that has enabled mankind as a whole to make progress in the face of the mere dead matter that surrounds us; and it is the quality we need most to keep making progress. The making of money is no different -- those men who are good at it, who have made a lot, are the very men who burn with the greatest desire to make ever more (until they get older, subside, and, if they're American, usually turn to good works and philanthropy). Far from being a vice, I regard this as a virtue and a form of excellence, and I hate seeing it traduced and maligned by people like the writer of this essay.

Post: #8

Quote:Did Michael Jordan suffer from "championship addiction" because after he won three championship rings he burned with an equally strong and implacable desire to win one, two, or three more? Did Thomas Edison suffer from "invention addiction" when he kept trying to design more and more new things? Is soup suffering from "player's addiction" because after a great year of pulling pussy all he can think of is how to up his notch count and increase quality at the same time?

Well, yes. It's called the Hedonic Treadmill. The basic idea is that even after something really great happens to you, like winning a championship game, inventing the light bulb, or having sex with the hottest girl in the city, you still aren't that much happier than you were before. You find yourself needing more and more, and no matter how much you have you still don't feel truly fulfilled. This is what the guy was talking about when he said he wasn't happy even with a million dollars in the bank at age 25.

Now, this isn't necessarily a bad thing. We all benefit when Michael Jordan comes out on the court to kick some more ass, or Edison invents the phonograph, or soup... well, we really don't benefit when soup has sex with anybody. Maybe that last one isn't the best example. But the point is that there's nothing inherently wrong with a drive to succeed and better yourself. The problem is when that drive makes you do things you shouldn't. In Wall Street's case, that was bundling up shady mortgages and doing all the other sleazy things that lead to the '08 crash. Even without that stuff, the people on Wall Street were making serious, serious bank. They weren't going to be out on the street and starving to death, no matter what happened. But the hedonic treadmill, what the article termed "Wealth Addiction", drove them to do something that blew up in their faces. And our faces, too. I personally lost a very lucrative exclusive contract with a company that did over a billion a year in sales, and a lot of people I know lost their jobs. Some have never recovered.

Now, you said, "Far better that people act in their own self interest, which they do know something about, and let the invisible hand do its magic. It is when arrogant intellectuals decide that they know what's best for everyone else that we start getting into real problems." And a lot of times this is true. It's certainly possible for know-it-alls to make a mess of things. And even when regulations are sensible, there are still things like Regulatory Capture that can make a mess of them. But the idea that everyone acting in their own self-interest will automatically result in the best for everybody strikes me as simple naivety.

Post: #9

(01-27-2014 12:36 AM)The Lizard of Oz Wrote:  I did not address the underlying argument of the essay because I don't really see one, or rather it strikes me as self-evidently absurd. Did Michael Jordan suffer from "championship addiction" because after he won three championship rings he burned with an equally strong and implacable desire to win one, two, or three more? Did Thomas Edison suffer from "invention addiction" when he kept trying to design more and more new things? Is soup suffering from "player's addiction" because after a great year of pulling pussy all he can think of is how to up his notch count and increase quality at the same time? Well, in the latter case, I'm not so sure...

I think we are not thinking of the same definition of addiction. What you are describing as addiction, I would describe as 'passion.'

My definition of 'Addiction' is something that ultimately leads to significant harm of self and/or others in the pursuit of it. In historical cases, the rich have often engineered the collapse of the very systems that made them rich in the first place - it never made sense to me why people would deliberately sabotage their own countries for their own gain only to see those gains wiped out by barbarian invasions (which would not have occurred if their country was still strong).

So the idea of wealth addiction explain how it is that a small group of people will deliberately destroy the long term basis of their wealth for the sake of a short term gain. The ultra-wealthy have, several times in history, have exempted themselves from taxes, installed economy slowing monopolies, crushed entrepreneurship, corrupted government, shifted burdens of the state off their shoulders onto middle classes, deliberately sabotaged and exploited the middle classes, exempted themselves from military service - all for their own gain. Which makes no sense because once the social system starts to decay it becomes vulnerable to invasion/rebellion and confiscation of that very wealth by foreign invaders or by revolutionaries from within.

This historical process seems to be repeating itself in our era. It was nice to finally get an insight as to one reason why this process occurs, which is what I got from the article.

Post: #10

Discussions like this are one of the many reasons I come here.

A lot of food for thought. Thanks.

My two cents (no pun intended) is that wealth addiction is very real, and is a male trait.

Money = power (I actually prefer to use the term control rather than power, since this is what it boils down to).

Wealth addiction? Look no further than Madoff. The man knew what he was doing was destroying people but he simply couldn't stop.

Post: #11

Power is addictive in all its forms, and the more one has, the more addicted they get to becoming even more powerful. Examples:

1.) lots of guys lifting start out kind of into it, but as results come (more physical power) they get even more and more into and start taking the more extreme measures to get even more power.

2.) Look at feminism. Now this is just my observation but it seems they get more and more obsessed with power the closer they get to total power. They're more vocal than ever (social media has been a big part of this).

To be honest, I do think being obsessive or an addict is key to getting what you want. You ever hear regular people talk about rich people and wonder why they don't retire since they already have so much money? It's the addiction and the game of it. It's this drive that makes the rich guy rich and the average guy average. They're not just in it to have enough money to live comfortably for the rest of their lives, which is what the average guy is thinking about.

Post: #12

(01-29-2014 03:39 AM)nek Wrote:  To be honest, I do think being obsessive or an addict is key to getting what you want.

Again, I think it's worthwhile differentiating between being passionate about something and being addicted to something. Passion/drive is simply getting what you want to the benefit of yourself or others, while addiction is when there is clearly harm to yourself or others. Scuba's Madoff example illustrates this nicely.

Post: #13

However, Madoff's addiction is clearly defined as an overwhelming urge that overrules his sense of guilt, morality and judgement in order to get more of the stimulus (money).

However, what if Madoff was just passionate about money, not addicted? And he did the awful things he did merely because he had no sense of guilt, morality or judgement from the start?

Maybe it wasn't an addiction for money that conquered his concern for others; rather, it is possible that he had no concern for others to begin with - and it manifested itself in the treacherous way he pursued his passion.

Post: #14

(01-29-2014 05:17 AM)Handsome Creepy Eel Wrote:  However, Madoff's addiction is clearly defined as an overwhelming urge that overrules his sense of guilt, morality and judgement in order to get more of the stimulus (money).

However, what if Madoff was just passionate about money, not addicted? And he did the awful things he did merely because he had no sense of guilt, morality or judgement from the start?

Maybe it wasn't an addiction for money that conquered his concern for others; rather, it is possible that he had no concern for others to begin with - and it manifested itself in the treacherous way he pursued his passion.

A passionate sociopath, perhaps?