Is Greed Good?
by Dr. Doug Cardell
As an economist, I am often asked about the line from the movie Wall Street, "Greed is good!" People ask if it's true. The simple answer is no. Greed is one of the seven deadly sins. These are derived and refined from ancient folk wisdom and early philosophical works. They became part of the teaching of the Roman Catholic church in the fourth century and were put in the modern form by Pope Gregory in 590. Most Christian denominations have since adopted it. Some call them the capital vices, believing they lead to all the other vices. The seven are pride (false pride or narcissism), greed, wrath (anger or rage), envy, lust (for more than necessary), gluttony (too much eating or drinking), and sloth (laziness). Islam and Buddhism have more limited lists, but greed is on both. Looking at the lists carefully reveals that greed is maybe more fundamental than the others. Pride is greed for attention or undeserved praise. Greed denied results in anger. Envy is a type of pre-greed or a greed motivator. Lust is greed across a broader range of objects. Gluttony is greed for food or drink. Sloth is greed for an easy life. If envy is pre-greed, envy and the resulting greed may be the "root of all evil." People often misquote the Bible as saying that money is the root of all evil, but it actually says, "the love of money is the root of all evil"; the love of money is greed. This blind love leads one to do anything for money. What is the difference between greed and legitimate self-interest? Self-interest is necessary for survival. All living organisms possess it. A more detailed explanation is available at Spontaneous Order. Greed is seeking far more than needed while disregarding the means of obtaining it. Wanting to increase financial gain by fair exchange is not greed, no matter how much money is involved. If the trade is even, all parties to the deal feel benefitted. A budding entrepreneur builds a new phone app that millions love and becomes a multi-billionaire is not guilty of greed. The venture capitalist who supplies the entrepreneur with the funds to get the phone app off the ground and shares in the billions generated is not guilty of greed. Consider gluttony as a metaphor for greed. Is eating six large meals a day gluttony? Not if you are an Olympic weight-lifter or ultra-marathoner. Eating 6000 calories a day is not gluttony if you are burning 6000 calories a day, but if you are burning 1500 calories a day, it's gluttony. Consider lust as the lust for power. Learning martial arts for sport or self-defense is not lust for power, but learning karate to bully others is. Learning hypnotism to heal with hypnotherapy is not lust; hypnotizing people to bend them to your will is. Think a moment about pride. Is it wrong to finish a significant accomplishment a feel proud of yourself for getting it done? No! Is it wrong to make up a false accomplishment and put it on your resume? Yes! Is false pride or narcissism or putting yourself above others wrong? Yes! Greed is similar; wanting more rewards—money—by providing others with something of value to them is not greed; cheating them in the deal is. Greed is wanting money over morality. It's not wanting money that is problematic but wanting money badly enough to be willing to do immoral things to acquire it. In describing Jewish philosophy, Hillel the Elder said, "If I am not for myself, who will be for me? And if I am only for myself, what am I? And if not now, when?" Looking out for one's self-interest is necessary; doing for one's self at the expense of others is wrong. Wealth was once a zero-sum game. The only way for one person to gain is to take from others. Too many of us still believe that's the way of the world. It's not! Almost all of the world now enjoys a growth economy, a positive-sum game. That means that instead of all of us sharing a pie that has a fixed size, we all worked together to make a bigger and bigger pie. In a fixed-size economy, the wealthy were greedy because they could only become so by exploiting others. However, in today's growth economy, the rich acquire wealth with innovation that grows a bigger economy and delivers a bigger piece of the pie to everyone. Are there still greedy capitalists today? Of course, there are. Since their greed drives them to find ways to cheat, it is incumbent upon the government to find them and stop them. Are most free-market capitalists greedy? No! Most capitalists and entrepreneurs constantly seek better ways to create products and services the world needs and wants. Greed is definitely not good. However, there are many greedy people in the world, including some doctors, lawyers, carpenters, shopkeepers, and, yes, some capitalists and entrepreneurs. There are greedy people in every walk of life, but it's bigotry to blame the whole group for the greed of some. One of the legitimate roles of government is policing harmful behavior, and the extent to which greedy members of any group succeed is a failure of government. Summing up, what identifies greed is its status as a capital sin. That is if it leads to other bad behavior. If chasing money causes one to lie, cheat, or steal, it's greed. If looking for a quick buck leads you to try and use the government to help you at the expense of others (corrupted capitalism), then it's greed. Seeking legitimate sources of income and wealth is not greed. Possessing substantial income or wealth, honestly obtained, is not the result of greed but excellent fiscal management.
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