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Friday, December 12, 2008
In yet another wierd life follows fiction episode comes this story (more here):
Madoff's alleged $50 billion fraud hits other investors
The story is that Madoff, one of the great names on Wall Street, ran a ponzi scheme that has fallen apart and is leaving a bunch of people penniless and scrambling to find some answers and these people are lashing out at the regulators - demanding that someone be held accountable.
In Ayn Rand's Atlast Shrugged one of the protagonists, Fransisco D'Anconia, intentionally destroys his copper empire and, in the process, destroying the wealth of those who had invested in his company. Fransisco has a conversation with another character in which he points out that none of the people who bought stock in D'Anconia Copper ever asked Fransisco what his intentions were, rather they simply assumed that his objective was to make profit, which would then be shared with the shareholders. Fransisco points out that he might have had, and indeed did have, a very different objective function - to sucker people in and then destroy their wealth. Fransisco destroyed his company on what Ayn Rand considered moral grounds - it was Fransisco's company and he could do with it what he pleased. Obviously there are many people who would argue in the opposite, that Fransisco had an obligation to his shareholders to inform them of his intentions, or D'Anconia had an obligation to share his wealth-creating abilities with those "less fortunate", or D'Anconia should have sacrificed his own desires to the hopes and dreams of his stockholders, or some other such clap-trap.
Whether Madoff is a modern-day Fransisco D'Anconia is impossible for me to say, but it is an interesting thought experiment. Even if he isn't a D'Anconia-type figure, the outrage of those who entrusted their personal MILLIONS of dollars to someone and then wanted the regulators(!) to monitor Madoff's performance is very similar to the outrage the "victims" in Atlas Shrugged express.
The link to Francisco D'Anconia was the first thing that popped into my head when I read the news about Madoff. It will be interesting to see what Madoff's true motives were -- perhaps he was trying to stave off his financial ruin until after he had died, but this financial meltdown beat him to it. Or, maybe he did have very D'Anconia-esque intentions? I hope we get to find out.
It was the first thing that popped into my head too. Also interesting is the Alan Greenspan angle (a close associate of Rand for many years before becoming Fed Chairman), whose monetary policies at the Fed seem tailor-made to precipitate the current economic crisis.
I think most Articles of Incorporation today specifically point out that the purpose of a for-profit business corporation's goal is to make money for its shareholders.Post a Comment
Deliberate destruction of corporate property by an officer is as against the law as it would be for anyone else.
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