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Schroeder on Obsession with Bonuses

By Lawrence Solum

Jeanne L. Schroeder (Yeshiva University - Benjamin N. Cardozo School of Law) has posted Wall Street's Obsession with Bonuses on SSRN. Here is the abstract:

The common adage ? ?money is the root of all evil? ? is a mistranslation of a phrase from St. Paul?s first Epistle to Timothy. ?Radix omnium malorum est cupiditas? means ?the love of money is the root of all evil?. Cupidity, or avarice, is one of the seven deadly sins ? ?not merely a wrongful act, but a disposition that corrupts the soul and serves as the occasion of additional sins.?

This insidious mistranslation shifts the source of evil away from the subject of the sin (the lover of money) ? to its object (the beloved money), thereby implicitly relieving the sinner of his responsibility . To Immanuel Kant any such attempt to shift blame is itself a form of ?radical? evil ? that is, a banal evil that lies at the root (radix) of all human action. Nevertheless, when viewed through the prism of the psychoanalytic theory of Jacques Lacan, the mistranslation of Paul is unintentionally insightful.

The pricking of the real estate bubble and subsequent market meltdown in 2008 looks crazy in the colloquial sense of the term. From the perspective of psychoanalysis, however, Wall Street culture exhibits a specific pathology ? obsessiveness.

What does market madness have to do with the evil of money?

An obsessive obsesses about obtaining an object because he subjectively experiences it as the cause of his desire. Obsession is insatiable because it is deluded. The obsessive does not really desire the object, but something else he can not admit to himself ? the love of others. The pursuit of the object is a fool?s errand that can spin out of control leading to a breakdown and paralysis.

To Wall Street ?traders?, the annual ?bonus? can function as the object cause of desire. As such, although money is not the root of all evil, it can function as the cause of some very destructive behavior.

In this Article, I examine the ethics of the trader culture. I do not, however, attack capitalism per se. Nor do I consider the social, political, economic or legal implications of the size of Wall Street compensation or income disparity in this country. Rather, I address the obsessional logic of the bonus.

Full post as published by Legal Theory Blog on April 08, 2010 (boomark / email).