#6 – Capitalism Fosters Greed and Government Policy Must Temper It : The Freeman : Foundation for Economic Education

#6 – Capitalism Fosters Greed and Government Policy Must Temper It : The Freeman : Foundation for Economic Education

“Greed” is a word that flows off Progressive tongues with the ease of lard on a hot griddle. It’s a loaded, pejorative term that consigns whoever gets hit with it to the moral gutter. Whoever hurls it can posture self-righteously as somehow above it all, concerned only about others while the greedy wallow in evil selfishness. Thinking people should realize this is a sleazy tactic, not a thoughtful moral commentary. Economist Thomas Sowell famously pointed out in Barbarians Inside the Gates and Other Controversial Essays that the “greed” accusation doesn’t meet the dictionary definition of the term any more. He wrote, “I have never understood why it is ‘greed’ to want to keep the money you have earned but not greed to want to take somebody else’s money.”

Let’s not forget the fundamental and critical importance of healthy self-interest in human nature. We’re born with it, and thank goodness for that! I don’t lament it for a second. Taking care of yourself and those you love and have responsibility for is what makes the world work. When your self-interest motivates you to do that, it means on net balance you’re good for the world. You’re relieving its burdens, not adding to them. A common but misleading claim is that the Great Recession of 2008 resulted from the “greed” of the financial community. But did the desire to make money suddenly appear or intensify in the years before 2008? George Mason University economist Lawrence White pointedly explained that blaming greed for recessions doesn’t get us very far. He says, “It’s like blaming gravity for an epidemic of plane crashes.” The gravity was always there. Other factors must have interceded to create a serious anomaly. In the case of the Great Recession, those factors prominently included years of cheap money and artificially low interest rates from the Federal Reserve, acts of Congress and the bureaucracy to jawbone banks into making dubious loans for home purchases, and government entities like Fannie Mae and Freddie Mac skewing the housing market—all policies that enjoyed broad support from Progressives but never from genuinely “free market” people. The Progressive perspective on “greed” is that it’s a constant problem in the private sector but somehow recedes when government takes over. I wonder exactly when a politician’s self-interest evaporates and his altruistic compassion kicks in? Does that happen on election night, on the day he takes office, or after he’s had a chance to really get to know the folks who grease the wheels of government? When he realizes the power he has, does that make him more or less likely to want to serve himself? The charlatan cries, “That guy over there is greedy! I will be happy to take your money to protect you from him!” Before you rush into his arms, ask some pointed questions about how the greedy suspect is doing his work and how the would-be protector proposes to do his.

If you are an honest, self-interested person in a free market, you quickly realize that to satisfy the self-interest that some critics are quick to dismiss as “greed,” you can’t put a crown on your head, wrap a robe around yourself and demand that the peasants cough up their shekels. You have to produce, create, trade, invest, and employ. You have to provide goods or services that willing customers (not taxpaying captives) will choose to buy and hopefully more than just once. Your “greed” gets translated into life-enhancing things for other people. In the top-down, socialized utopia the Progressives dream of, greed doesn’t disappear at all; it just gets channeled in destructive directions. To satisfy it, you’ve got to use the political process to grab something from other people. The “greed” charge turns out to be little more than a rhetorical device, a superficial smear intended to serve political ends. Whether or not you worship a material thing like money is largely a matter between you and your Maker, not something that can be scientifically measured and proscribed by lawmakers who are just as prone to it as you are. Don’t be a sucker for it.