EC Three Things I Think I Am Thinking About – Martin Shkreli Edition

Here are some things I think I am thinking about:

1)  Why does the world hate Martin Shkreli? Christmas came a few days early for the 90% of the world that completely despises Martin Shkreli, the hedge fund manager and pharma CEO who allegedly ripped off investors. An interesting discussion has surrounded the hatred of Shkreli. Ezra Klein says he’s a symptom of the system and not the problem. In essence, Klein argues that there will always be people like Shkreli because the system breeds people like him who are greedy, evil, self promoters.

I have to admit that I hate this kind of negative thinking. Economic systems are only as good or bad as their participants. Capitalism is often portrayed as this inherently greedy system, but that is terribly misleading. After all, capitalism is nothing more than a system in which people who produce much are rewarded monetarily. Invent the iPhone, get lots of money. Give great back rubs, get lots of money.  It’s more complex than that and there are always bad apples, but you get the point. Whether those capitalists are “good” or “bad” is not a function of the system itself but the participants and their scruples.

But this gets to a much simpler point that makes Shkreli so reviled. A friend of mine once asked me what my “purpose” in life was. I said that I would like to be remembered as someone who gives more than they take – someone who lives a “life deficit”. There are two types of capitalists in this world in my view; those who run life deficits and those who run life surpluses. Those who run life surpluses want to take, take, take from the system. They want to be rewarded for the output they contribute AND they want to keep that monetary reward for themselves. The capitalist who runs a life deficit wants to be rewarded for their output, but also gives a good deal of their monetary reward back (willingly) to those who weren’t as fortunate to have the skills or situation in life to achieve what they did.