Greed

Posted by Michael at 9:25 pm on February 25, 2009 in Economics, Politics

I tire of hearing the word greed thrown around. It’s a subjective, loaded term used for political expediency rather than descriptive clarity. It’s just another plank in this ridiculous class warfare platform that has shaped economic debate over the last few decades. Dumb, anti-intellectual and leaving us torn between two very stupid paths.

It would be nice if we turned to economists to help us weather periods like this rather than ideologues, but then that might involve an actual exchange of ideas based solely on their merit. Perish the thought of losing the satisfaction of calling one another stupid, naive, greedy, anti-poor or whatever new invectives have floated to the surface of the blogosphere lately.

The interesting thing about greed is that it’s never us who’s greedy, it’s only other people who are greedy.

Greed is a loaded code word for desire, nothing more. No society, no government, no moral code can ever erase that element of the human condition. All societies run on greed from the freest economy down to the most supposedly egalitarian command economy. No matter how pure the intents of thinkers like Marx and Lenin their efforts to subdue and control this basic element of human nature ultimately created a system prone to more corruption and more greed than the most open of economies.

That is, as history has shown, the inevitable path of any discretionary power pyramid.

Greed is who we are, it’s ingrained into our genetics from our hunter gatherer days and reinforced by the way the human animal socializes. And that is independent of any given society. The ability to harness greed for the collective good is part of the beauty and poetry of a free market. In a free market no transaction occurs without benefiting both parties.

Let me repeat that because it’s very important. In a free market no transaction occurs without benefiting both parties.

The obvious rebuttal to that is to point to transactions where an individual has been taken advantage of. The mistake there is the assumption that belief that markets should be as free as possible somehow requires a belief in no oversight. Nothing could be further from the truth. One of the most important roles of government is to enforce property rights and control corruption. And that includes creating an environment where transparency is required and providing a path to restitution for those who are taken advantage of.