This past week I’ve been contemplating corruption. And capitalism. And where the line is drawn that divides the two.

I am a good capitalist, American style. Having lived all over the world, I returned to the U.S. to start my consulting practice many years ago, because the richness of opportunity here did not exist anywhere else for a young entrepreneur.

And I am an honorable capitalist. But then, of the three major human motivators (power, fame and money), I am not motivated by money, so greed is not my weakness, and the line is usually very clear to me.

But I understand that the capitalist system gives a kind of permission to believe that “working the system” and especially “beating the system” by exploiting its weaknesses is just savvy business practice. We all remember Gordon Gekko (“greed is good”) http://bit.ly/a0rMTr  from the film Wall Street in the late 1980s (since film never dies), who will return to us soon to a big screen nearby, just released from his fictional jail sentence.

As this recession persists (formally in economic terms, or just in its effects on folks), I know that our culture will continue to support smart people in finding new financial vehicles to contribute to their personal wealth without thought of its larger consequences. At the same time, this same tendency and talent is the other side of the coin of philanthropy, which we are seeing in abundance now as well. Both greed and philanthropy are in the nature of the human, in America or anywhere in the world, in whatever economic system they may live. In fact, it seems the U.S. has significantly less of the common-variety corruption (like bribes) than other cultures.

And this weekend, I listened intently to NPR’s This American Life’s current offering “Inside Job” (part one, nearly 40 minutes) on how Magnetar, a hedge fund, contributed to the economic breakdown which all players claim to “not have seen coming.” Turns out lots of folks saw the trick that was being played. Several bankers I’ve spoken with acknowledge this.

Now, I pay close attention to economics, because world and U.S. economics affect my early stage entrepreneur-clients, and we need to design our strategies in that larger context. So I know a good deal of what has happened these past years to get us to the horrible condition we find ourselves in today. Explaining all this in simple language is a challenge.

So I was intrigued by this broadcast, based on months of research conducted by ProPublica’s Jesse Eisinger and Jake Bernstein (also in a print version). Both give simple definitions of complex financial vehicles, how they work, how the system was exploited, and the consequences. The links in the article offer extensive background from the research, and even an 11-slide graphic show of what happened. Excellent simplicity!

So, I highly recommend you take the time to listen to and/or read this. Settle down for once, don’t be multi-tasking, and pay attention. And if you are so moved, let me know what you think.

This American Life http://bit.ly/9WdvT5
Propublica on Magnetar http://bit.ly/dbR6fg
Propublica slide show http://bit.ly/aG0enT