Contexts for Contemporary Business Paper

Topics: World economy, Economics, The Fable of the Bees Pages: 7 (2624 words) Published: July 30, 2014
Private Vices Lead to Public Destruction in Global Economies

In Bernard Mandeville’s poem, “The Grumbling Hive; Or Knaves Turned Honest” Mandeville describes a community of bees in which the hive is flourishing until the bees are suddenly made honest and virtuous. He draws a comparison between bees and humans in a societal framework and advocates the idea that each person in society is afflicted with their own “vices”. He purports that vices and corruption are advantageous to society because they act as a form of lubrication that assists the society to operate more smoothly which helps produce public benefits. It is by helping to produce these public benefits that vices ultimately lead to good. Mandeville writes, “Private vices may be made public benefits through skillful management by a wise politician “(ibid., volume 1, p. 169). Certainly one could argue that the very nature of the human condition is that we all are afflicted by sin; and it is through this sin that things like greed, avarice, and insatiability arise and manifest themselves in the form of “vices”. Are there any differences in the degrees to which vice and greed that occurred during Mandeville’s generation were committed versus vice and greed committed by members of present day societies? Does Mandeville’s vision regarding the concept of vice and the way it helped to produce public benefits at the turn of the 17th century in England, still hold true in our modern-day, globally oriented society? I propose that “societal vice” in the context of a modern-day, global scale economy is actually much more harmful and detrimental to societies, and to world economies as a whole, than it is advantageous. I also propose that present day vice, greed, and corruption executed in the financial world by politicians, stockbrokers, bankers, and other important members of society in positions of power are now able to be performed and executed on a much larger and more poisonous level than Mandeville probably ever dreamt of. The vice and greed of the investors and the ordinary citizens are detrimental because their actions help fuel the much larger system as a whole. In essence, all investors have the vice of greed and the reason they invest is to improve their financial condition and situation. While there are many hardworking people who prudently and cautiously invest their money, there are also similar people who blindly and speculatively invest their money in the hopes of making exorbitant profits. I liken both groups of individuals to people who are working in the basement of an extravagant mansion, throwing logs into a large fireplace. The mansion could be compared to the “global financial machine” throughout the world and the people throwing the logs into the fire are the small investors in this great machine. Some invest a few logs into the fire while others invest more logs. Both have the desire and “greed” to get warm, gain wealth, and improve their financial condition. In Mandeville’s day, even though every member of society had greed and vice in them, the “financial fireplace” of this large mansion was much smaller and not as interconnected with other financial mansions, as in a contemporary, globally connected world. The real problem arises when the bankers and stockbrokers who are working at higher levels of the mansion, take the benefits of the hard work that has occurred in the basement, and then greedily invest this hard work in the hopes of making even more money. The bankers and stockbrokers are managing each of these large “financial houses” and have few legal or moral constraints placed on them. In a global economy all of the financial houses are placed very closely together and interconnected to each other through a very sophisticated set of phones and computers. The bankers and stockbrokers use this elaborate communication mechanism the trade heat back and forth as needed, with little regard to the potential negative...
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