The Banality of Martin Shkreli

Martin ShkreliPeople might assume that I’m happy to see Martin Shkreli hauled off to jail. But I’m not. He’s the hedge fund wunderkind who raised the price of Daraprim from $13.50 to $750. He got a lot of attention for this clearly greedy move, but it was actually a sign of hubris because it caused another company — seeing an opportunity — to enter the market and sell the drug for $1. So there never was much indication that he was anything but a con a man. The problem is that I just don’t see how he is that different from the fools that millions of people worship on Shark Tank.

There is something very wrong with our capitalist system. I’ve noticed this again and again throughout my life. It is not brilliance — much less the ability to improve the world — that is key to business success. For many, like Mitt Romney, making money is mostly about being in the right place at the right time. But for many more, it is about being ruthless. And the distinction between legal ruthlessness and illegal ruthlessness strikes me as almost semantic. It doesn’t surprise me in the least that someone like Shkreli isn’t clear about the distinction. It is almost certainly clear that Mitt Romney did far more harm in his legal business career than Shkreli did in his career even if all the charges against him stick.

I think this is what happens when you have a society based on the idea that nothing matters but profit. Yes, I know there are courses on business ethics. But it strikes me rather the way war crimes tribunals work — namely, you only face them if you lost the war. As it is, if Martin Shkreli really is worth $100 million, he may manage to get out this legal bind. Our system is, after all, set up so that it is really hard to convict anyone who can mount a good defense.

As it is, there is only a small amount of Shkreli’s career that has landed him in jail. And it has nothing to do with him jacking up the price of Daraprim — a move that certainly caused harm and could have cost lives. But that was a move that was widely praised (or at least apologized for) in the business press. What he’s in trouble for is not all the harm that he has done, but rather for the specific harm that he’s done to members of his own class. As Michael Hiltzik noted, that’s mostly what this is all about.

I’m getting tired of all this. When Martin Shkreli burst on the scene as a price gouger, I didn’t see much of the outrage. He was doing, after all, what we generally praise business people for doing. If he had quintupled the price of the drug up to $67.5, I doubt anyone would have noticed, even though that change would have been excessive. There just seems to be a certain hypocrisy in our society. We expect them to be anti-humanists. In fact, we praise them for being so. We hold them up as demigods. So I feel no schadenfreude toward Martin Shkreli — just sadness for a badly misguided civilization.

This entry was posted in Politics by Frank Moraes. Bookmark the permalink.

About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

15 thoughts on “The Banality of Martin Shkreli

  1. Basically it appears to be the same thing that happened to Martha Stewart. It is a bone being thrown to the masses with a deeply unsympathetic character without ever going after the people who do a lot more damage.

    He also was not hauled off to jail-he was booked, initial appearanced and released within 24 hours. In NY, that is proof you are rich as the poor spend up to three years or more languishing in the nortorious Rikers prison waiting for their cases to be processed.

    I was annoyed, but not surprised, to hear about him doing this. If you pay attention at all to the major systems in this country, you can clearly see there needs to be change. However it doesn’t happen overnight and takes steady, relentless pressure. The Clinton years showed that with his efforts to reform the federal government and make it more smooth lined.

    • Well… It looks like Shkreli really did do some things wrong. I believe Stewart was basically innocent and the feds went after her to show that they were doing something. But there is no doubt that little will happen to Shkreli. His biggest problem are the lawsuits against him.

        • If he does do that, he will find investors to get him going again. Because he is a “maker” and not a “taker.”

          • He does seem to be pretty good at sweet talking people into doing stupid stuff. Or maybe he points out it is a good tax write off. I do not know enough about the tax issues there but I know that sometimes rich people purposely lose money to get their taxes down.

            • I’ve been totally amazing in my career how obvious charlatans can get rich people to give them money. They will never give me money because I’m too honest about problems. But if someone just comes in and seems convinced that they are right (think: delusional), the rich can’t reach for their wallets fast enough. I’m glad I don’t work around those kid of fools any longer.

                • I don’t think they are amoral; they’ve just convinced themselves that they are so amazingly great. It’s also telling that people who are like that are the ones who fall for it. My friends see someone like that and automatically assume he (it’s always he) doesn’t know what he’s talking about. It’s not hard to stop these people by getting really specific — past the buzzwords.

                  • I mean amoral as the person selling the snake oil is amoral. They don’t care about the damage they do to rich people and I would feel bad even though most rich people are terrible.

                    • Yeah, but if the snake oil salesman really believes in snake oil and uses it himself, is he amoral?

                    • It’s a good question. I don’t know. It’s hard for me to get into the mind of people like that.

  2. Where did this guy get his money? Immigrant parents who worked menial jobs. He supposedly left school young to start a career in finance, but with what? So he’s either bright or lucky, or both, but you don’t get wealthy without money to start with.

    • My understanding is that hedge funds are mostly a con. If you can talk a good game, you can get people to invest in your schemes. I assume that’s how he got going.

    • There is an amazing book — really a stunner — called “Octopus,” by Guy Lawson. I read about it in a Taibbi column, read the book, and Taibbi predicted it would become a Hollywood hit. Taibbi was wrong about how movies work.

      The guy in this book, a hedge-fund dude, started out a regular trader. He soon learned that trading is basically a huge scam. You get inside info, you make money from it, you make sure not to let your wacky successful bets look too outrageous. Most of this involves channeling inside info into client profits instead of personal wealth. Client profits, the SEC won’t look at. Personal profits as a trader, the SEC might.

      So once you’ve built up a little bank and some investor phone numbers, you get off The Street, you go hedge fund. Now you can make personal profits and nobody cares. But now you’re also cut off from all the dirty inside info on the trading floor which made you a “successful” trader.”

      “Octopus” is about a guy who cheated constantly as a floor trader, then went hedge fund and started losing money hand over fist.

      He fell victim to a really elaborate scam, involving sophisticated crooks from all over the world, who convinced this guy he could save his struggling hedge fund if he doubled down and invested in the Serious World Of Secret International Finance, where all the grownup money was made.

      The guy, about to get in real trouble over how over-extended his hedge fund was, bought the Secret International Finance line completely.

      Today, from jail, he insists the Secret International Finance cabal is a real thing.

      What’s key about the book is that this guy made money hand-over-fist cheating constantly. So, why not believe there’s a higher level of sophisticates playing his ilk for fools the way he played investors for fools when he was a floor trader? Makes sense to him.

      To answer your question, there are definite ways for anybody to “make it,” to get rich, in America today. Get good grades, go to the right colleges, become a Wall Street trader. That’s money slipped into your pocket right from the get-go.

      Or run a collections agency. With very little investment, and the right number of savage goons on the phones, you can buy overdue bills for fractions of pennies on the dollar and scare people into paying up portions of their past-due accounts.

      What you can’t do in America is be an honest businessperson and easily get rich. Honest businesses are enormously risky.

      You can go from the gutter to the penthouse if you are really good at absolute shamelessness. And then you can run for office, apparently.

Leave a Reply

Your email address will not be published. Required fields are marked *