In a mean-spirited and illogical attempt to sway the jury in Dennis Kozlowski’s case, his prosecutors showed the video of the Sardinian extravaganza, which was then immediately broadcast on prime time television to a somewhat indignant nation. It was also uploaded to countless web servers for the benefit of curious internet surfers.
Personally, I fail to understand the slander being directed at Tyco’s former chief. Ever since Ronald Reagan, American business and government have invoked an official theology of supply-side and trickle-down economics, allowing the filthy rich to get even filthier rich so they will spend their gains, no matter how ill-gotten, and help to employ lots of others in menial but remunerative positions.
Of course, we could question Kozlowski’s taste – indeed, we already do. But the result of his invisible hand was every bit as sure as Adam Smith described in The Wealth of Nations: ‘Every individual necessarily labors to render the annual revenue of the society as great as he can… He intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for society that it was no part of his intention. By pursuing his own interest he frequently promotes that of the society more effectively than when he really intends to promote it.’
So just think of that Tyco toga party and its benign economic effects spreading ripples of lightsome joy across the globe. As a result of the hedonistic, boorish and philistine Kozlowski, the ailing travel industry got a big shot in the arm as his guests flocked in from across the world. And you can bet that they didn’t travel steerage. No – these party people would have traveled business or first, and they would have made the travel agents work hard to ensure the routing was just right.
Jimmy Buffet, his roadies, back-up band and all the dancers were gainfully employed and handsomely rewarded. This was not trickle-down – it was gush down, in the same way the vodka gushed from the penis of the ice sculpture of Michaelangelo’s David. In that sense, artists and vodka distillers were all rewarded by this birthday celebration, as were caterers and sommeliers from around the world. The party even did wonders for global trade – currency arbitrageurs got a dip in the trough as Tyco’s dollars were exchanged for euros to pay the local hired help.
Kozlowski could have emulated other CEOs and looted only stock options and a grossly disproportionate salary from the company, while hoarding his gains in stocks and bonds. In doing so he would have contributed to looming economic disaster and eventual social unrest. His loot would have added directly to the irrational exuberance of the stock market, and to the huge and growing divide between the wealth of the already rich and that of the vast majority of struggling Americans.
By spending $2,000 on the famous wastepaper bin and $16,000 on shower curtains for the office, he was also adding to shareholder value. If he had taken this money in options, it would have diluted the stock further.
Remember that rich Romans paid for bread and circuses to distract the plebeian voters. In this new imperial phase of US history, the skinflint-like lifestyle of the new rich – the corporate executives who have looted American companies’ shareholders and employees alike – disguises the extent of their depredations from the general public. This causes members of Congress and the White House to lie awake at night worrying about the super-rich, thinking of new tax breaks for them or inventing ways to funnel federal funds their way lest billionaires become an endangered species.
What we need is more conspicuous consumption, more egregiously wasteful parties to provide entertainment and employment for the millions who have lost jobs in the recent recession. This would also reassure Washington that it need not lose too much sleep over the welfare of struggling CEOs.
In recognition of his heroic sybaritic attempt to jump-start the world economy, I propose seting up the Kozlowski College of Conspicuous Consumption on Rikers Island, with compulsory attendance for anyone on the board of a listed company.
