While I identify and describe myself as a capitalist, there is an old aphorism which is in desperate need of retirement or, at the very least, revision: “Greed is good”.
This axiom allegedly encapsulates the economic theories of capitalism, which critics claim is characterized primarily by selfish and hedonistic avarice. After all, “greed is good” is the catchphrase which many capitalists themselves embrace. In doing so, haven’t its adherents admitted that cupidity is indeed what truly lies at the heart of capitalism?
I don’t think so.
In my opinion, a better way to communicate this fundamental principle of capitalism is to say that “self-interest can be beneficial”. There are several reasons for this.
I begin by making a distinction between greed and self-interest. While greed is often defined by “excessive desire” and is considered and condemned as vice across virtually all major organized religious, philosophical, and ideological practices, self-interest relates to the biological instinct and human inclination toward preservation of both self and species. A substantial number—perhaps even the vast majority— of human actions are motivated, to some degree, by self-interest. Our decisions regarding the jobs we work, the goods and services we purchase and consume, and the relationships we cultivate are driven, to at least some extent, by our internal and innate will to succeed and survive. Self-interest causes us to voluntarily engage and consensually participate within systems in a fashion which we otherwise would certainly not. Self-interest compels us to accept employment, exchange essential commodities, seek personal pleasure, and forge valuable social connections.
Greed, then, is excessive self-interest: too much of a good thing. Greed is a demonstrably adverse quality because it is not limited to mere self-preservation, but instead, aggressively and insatiably obtains immoderate advantages and opportunities at the expense of both other individuals and society at large. Self-interest endeavors to symbiotically secure safety, stability, and survival; greed, on the other hand, strives to maintain material superiority over others in a manner which directly harms them. Self-interest must evaluate peer members of society and recognize that their cooperation is required for communal advancement; greed, in contrast, may cheat, steal from, and discount others altogether. Self-interest functions in concert with counterparts to keep us alive; greed is willing to kill for more than it needs. Self-interest is constructive, while greed is destructive.
Essentially: greed is bad. Self-interest is good. Or rather, it can be good.
While it is probably best to refrain from delving too deeply into Clintonian parsing and pedantic interpretation of the word “is”, it remains important to note that self-interest has the potential to be a positive force, but it is not inevitably so. Make no mistake: greed and self-interest are not mutually exclusive. The former can give rise to the latter. The singularly focused pursuit and prioritization of personal gain to the detriment of others will invariably yield attitudes and behaviors which are greedy in nature. Self-interest, in and of itself, is not inherently immoral. Self-interest encourages us to accept roles and responsibilities within society, and these obligations allow us to contribute in meaningful ways. But pure self-interest extrapolated to its ultimate conclusion is simply greed which is pernicious and should be avoided. Thus self-interest, if it is well checked and well balanced, can be good.
But what is “good”, anyway? The word “good” can indicate either practical or ethical value. “Good” things, therefore, are either things that serve their purposes and accomplish their objectives, or things which are distinguished by unassailable virtue. Since the word “good” contains moral implications and because its utilization here may incidentally and controversially suggest that self-interest is a moral good, it is best to use a more specific and less ambiguous word: beneficial. This term allows us to examine the utilitarian consequences of self-interest without attempting to determine its morality.
And while there has been protracted debate regarding whether or not self-interest is a categorically moral good, self-interest does afford many objective benefits. Self-interest promotes industry and fosters progress. Pharmaceutical companies are incentivized by self-interest to develop and disseminate vaccines; viruses are eradicated and pandemics ended. Technologists are prompted by self-interest to invent the internet; the entire financial and infrastructural foundations of human civilization become efficient and effective beyond our wildest dreams. Manufacturers are inspired by self-interest; products become cheaper, better, and more ubiquitously accessible. You and I are urged by self-interest to pay our bills and have our fun, and our corresponding choices and efforts benefit us, our employers, our customers, our friends, and our families.
Adam Smith, author of The Wealth of Nations and founder of modern capitalism, referred to this as “the invisible hand”, a phenomenon wherein the combined and overlapping interests of millions of people are fulfilled through coordinated endeavors which satisfy the needs of numerous individuals simultaneously. According to capitalist contemporaries like Leonard Reid and Milton Friedman, it is self-interest which impels people to harvest lumber, mine for lead, generate rubber, assemble raw material, and transport completed projects. Together, these self-interested people produce the pencil. Applied more broadly, this invisible hand engenders the automobile, the personal computer, the cell phone, the skyscraper, and the clothes you are wearing right now. The deliberate harmonization of self-interest is a “rising tide which lifts all boats”. Collaboration is our single greatest asset, and it is self-interest which facilitates it.
This evinces a crucial fact: true capitalism emphasizes the collective benefits of self-interest rather than the enablement of rampant greed. Smith was not exhorting capitalists to impetuously proceed through life with reckless abandon and without a thought or care for others. Smith and his disciples are primarily concerned with the welfare of the general public, and are convinced that we can best achieve it by indulging our self-interests through competitive markets, private property ownership, and voluntary transaction within the boundaries and context of law and with the salient goal of common prosperity. Individualism, then, is not the highest ideal of capitalism, but a means through which to attain an end. That end is the wellbeing of all.
Your conclusions may differ from the arguments of Smith and those who followed him. But those arguments are valid and cogent. To assert that capitalism demands greed is to construct a fallacious caricature of economic theories which have actual merit and legitimacy. And to insist that capitalism does not work is to totally disregard centuries of contradictory evidence.
Capitalism is imperfect. The people and institutions which espouse and abide by it are fallible. In particular, crony capitalism, a goss distortion of capitalism which is predicated upon government complicity in and accommodation of economic exploitation, manipulation, and oppression, justifies its existence by appealing to the pretext that greed is good. But it is not. If capitalism is to continue to advance, we must dispel the myth that greed is good and that greedy conduct ought to be encouraged and commended. We must harness the potent capacity which self-interest offers while simultaneously rejecting the perils of unbridled rapacity. We must acknowledge that capitalism is not contingent upon greed.
While the expression “greed is good” is quippy and alliterative, it is time to dispatch it. Greed is not good, nor was it initially intended to be a basic component or stipulation of capitalism.
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| Photo courtesy of NBC |
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