We all know how to complete this phrase. Mimicking Gordon Gekko (who was in turn mimicking – or actually paraphrasing - Ivan Boesky) from the 1980’s film Wall Street, “Greed is good.” But greed is a sin, one of the Seven Deadly sins. And as we all know from Sister Mary Margaret’s well-wielded ruler, sin is bad.
Greed, like all the Seven Deadly Sins (and many others which are presumably less lethal), has been around for a very long time. From the book of Proverbs, King Solomon is supposed to have written that "six things doth the LORD hate: yea, seven are an abomination unto him." I would venture to guess that the concept of sin has been with us equally as long as the concept of good behavior.
Many leftists (Progressives, socialists and far-left Democrats) assert that greed is the essence of the capitalist economic system. They believe that Gordon Gekko’s phrase is what all Wall Streeters feel in their heart of hearts and how they conduct their business. They believe that greed and contempt for the concerns of other people drives the entire capitalist machine.
I don’t think that is the case but that’s not the point. Greed and the other sins, deadly or not, are part of our human make-up and have been with us since time immemorial – long before “capitalism.” It is part of our human nature: strong in some, less in others, but always there. It doesn’t matter what economic system we live under, greed will be present.
The beauty of the free market economic system (a description I think more accurately describes our current economic system than “capitalism”) is that the motives of the economic players are irrelevant to the benefits that society receives from economic activity. To repeat Adam Smith once again, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” It doesn’t matter if the butcher, brewer or baker is greedy or not. What is in his (or her) heart is irrelevant as long as the product is healthy, functions as claimed, is not defective and at a reasonable price as a result of competition from other butchers, brewers and bakers.
In our democratic social contract actions that harm or infringe on the rights of others are subject to legal recourse. Malevolent thoughts that are not acted upon are not punishable. So even though a merchant or businessman might be motivated by greed, if that person acts within the rules and regulations established by society there is no actionable cause. If fear of sanction by society prevents a person from acting on sinful thoughts; he (or she) might have problems when meeting his (or her) maker, but will not have problem before a judge.
Leftists of all stripes will deny that motives don’t matter. Motives are all that matter to leftists. They believe they are good people and that they do what they do because they want to do good. I also believe that they are (mostly) good people and that they want to do good. But their focus on motives makes them misidentify the cause of the inequities they perceive in the streets of America and around the world. And if you misidentify the cause of a problem, your proposed solution will not work.
Greed will still be present in the government-dominated societies that our progressive friends offer as solutions to the injustice in the world. But greedy people will not be found on Wall Street or in large privately owned corporations because such entities will cease to exist as the government dominates all economic activities. Greedy people will gravitate to government and state-owned enterprises (SOEs) because that is where their greed can be satiated. The problem in these government dominated societies is that there is no other institution to counter-balance government or expose the corrupt actions of these greedy individuals. Rather than expose and solve problems, government covers them up (just look at what is happening in Malaysia as well as Brazil and Venezuela right now). Countries where government is supreme are notoriously corrupt. Apparatchiks live like princes, managers of SOEs loot their companies. Shoddy and defective products flood the market at prices set by a committee of bureaucrats. Consumers that seek a solution to this dilemma are labeled economic saboteurs and criminals.
The problem we face in America is not that there are greedy people that are violating our rules and regulations; it is that these people have, in collusion with government, structured the rules and regulations such that these greedy actions are within the bounds of the law. Because the American social contract has been warped to the benefit of favored elites that can influence government, the people have lost trust in the system. The unique thing about America is that the people once had faith and trust in the American government. Most of the people on this planet have never had any trust in their government and are completely resigned to their fate. We still believe we can change things.
It is the rules of society that define how people are to act. The government is charged with creating a framework of laws and regulations that manage how the social contract functions. But the goal of this framework of laws and regulations should not be to punish the greedy bastards for their sins. Instead, the goal of the social contract and its framework of rules and regulations is to build the trust of citizens in their interactions, economic and social, with other citizens. So the goal of regulation is not to punish evil misdoers (although sanctions do play a role in the Rule of Law) or put business in a straightjacket but to restore trust in economic interactions and promote economic growth.
President Elect Trump promises to get rid of many of the onerous rules and regulations decreed by the Obama administration that are strangling the economic recovery. These regulations impose an especially deleterious effect on small businesses because of the high costs of compliance. But to give a free hand to base motives will not build trust in the economic system. Reducing the approximately 10,000 employees of the Food Safety and Inspection Service to 5,000 would save the government a lot of money and give a freer hand to meat and food producers but wouldn’t necessarily increase the public’s trust in the products of these companies and would, thus, be counterproductive (especially as people start to keel over from salmonella poisoning). Smart regulation designed to foster trust in our economic system would promote economic growth and create jobs. If Mr. Trump attempts to restore trust through direct personal action (as he has often done via Twitter) he will create an edifice of sand that will wash away once he sheds this mortal coil (or leaves office). If he wants to build a legacy for the history books he will reform and rebuild the American democratic institutions and restore the America Social Contract.