The Big Short versus Margin Call

Business ethics isn’t just about good guys and bad guys, contrary to what some Hollywood movies would have us believe.

I am an ethics columnist, not a movie reviewer. But I’ve just seen The Big Short, and it has me thinking about the public perception of business ethics.

The Big Short is a light-hearted, at times comic, take on the housing bubble 10 years ago that led to the financial meltdown of 2008. It has good guys and bad guys, smart guys and stupid guys, greedy guys and — well, they’re all greedy. The few women in the cast are almost always “the wife” or “the stripper.” Everyone is white. The film is based on the nonfiction book by Michael Lewis, so the dominance of white males is a reflection of Wall Street, not Hollywood.

The smart good guys realize there is money to be made from shorting the mortgage derivatives and, of course, they win. The explanation for the meltdown is that some evil characters fool a lot of stupid people, both on Wall Street and Main Street. The movie is fun to watch — especially the asides when incongruous famous people explain the financial instruments being traded (e.g., chef Anthony Bourdain comparing securitization to fish stew). As a viewer, you get to root for the side that wins and to feel smug that you would not have been fooled. At the end, you join in the outrage that almost none of the bad guys went to jail.

The trouble is that the movie reinforces the stereotypes about Wall Street. Because it focuses on the small group of really smart outsiders who see the bubble, we learn almost nothing about the bad guys. The few glimpses we get portray them all as really stupid or really evil or both. I have met a lot of people who work in the financial world of Wall Street or Bay Street, and I can’t recall a single one I would describe as stupid or evil (although I have encountered my share of jerks).

We (I include myself in this) all like to make money and to “win” against people on the other side of a transaction or pursuit. We all have the tendency to rationalize our choices, and to think of ourselves as good people. Beyond that, we vary in our degree of empathy, self-knowledge, trustworthiness, integrity and every other trait. We’re all ordinary people, albeit people who make more money than most of our fellow citizens.

If you see business ethics as being about good people and bad people, it’s hard to know what to do. You can bail out of the business world (good luck finding a different sector that is more ethical) or denounce capitalism (in favour of what?). But if you view the world as less black and white, you can start to tackle the really hard stuff. Acknowledging our greed and self- deception, how can leaders build a culture in their organizations that empowers employees to question decisions, value long-term sustainability and consider the impact of actions on others? How can we summon the courage to speak up when appropriate? What regulation is most effective in reining in the bad stuff?

If you want to watch a movie that paints a much more nuanced picture of Wall Street, check out Margin Call, starring Kevin Spacey. Released in 2011, it tackles the same topic but from within an investment bank. We see the young traders, the cynical veterans, the ambitious men and women on their way up (who then come crashing down). We get a picture of Wall Street culture and see how it impacts behaviour and decisions. We watch the toll it takes on the people who work there.

I have assigned Margin Call in my university ethics course, and it always sparks a lively debate. I don’t plan to assign The Big Short — not because it’s a bad movie, but because the ethics discussion that would result would be too brief to fill up a class.

About the Author

Karen Wensley


Karen Wensley, MBA, is a lecturer in professional ethics at the University of Waterloo and a retired partner of EY.

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