Gordon Gecko was right

By Albert DeSimone

Let’s cut straight to semantics. One of the most basic human flaws is greed. Greed is a primordial force of nature, manifesting itself in our social and cultural environment as excessive self-interest. 

It affects us in many ways, including the two major socio-economic systems—simplified as collectivism (socialism) and individualism (capitalism). 

Of course, not everyone is going to see greed the same way, but I discovered a study by the National Institutes of Health that sums up the view espoused above as well as any.  The article “Is Greed a Double-Edged Sword?”:

Many economists tend to believe that greed is good, claiming that greed is the driving force of economic development. The argument is that if people are eager to maximize their own interests and are never satisfied with their current possessions, they will eventually engage in activities that are beneficial to the whole society. 

Those familiar with Adam Smith, often referred to as the “Father of Capitalism,” will find the study echos these passages from The Wealth of Nations, published in 1776:

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.

By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it.

And I would be remiss to not give Gordon Gecko (Michael Douglas) his props from the 1987 movie Wall Street:

The point is, ladies and gentlemen, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit.

In classical socialist theory, the primary transition from capitalism to socialism hinges on shifting the means of production (factories, land, natural resources, infrastructure, and technology) from private, capitalist control to public or collective control.

This isn’t something for the human race to be proud of, but this human frailty is why capitalism works and socialism doesn’t. With capitalism, greed is distributed creating economic and reward incentives. With socialism, economic incentives are replaced by concentrated power. 

When an economic system seeks to abolish private self-interest by placing total control of production, allocation, and resource distribution into the hands of a central authority (socialism), it doesn't eliminate human frailty—it simply relocates it. 

If you are familiar with F.A. Hayek, 20th-century Australian economicist and philosopher, you might recognize the preceding paragraph as a distilled version of his philosophy. 

Continuing that thought, in his book The Road to Serfdom, Hayek wrote, “Money is one of the greatest instruments of freedom ever invented by man.”

When Adam Smith noted that we don't expect our dinner from the benevolence of the butcher or baker but from their regard to their self-interest, he was describing precisely this decentralization. 

Thomas Sowell offers a few final thoughts: 

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.

No government of the left has done as much for the poor as capitalism has. Even when it comes to the redistribution of income, the left talks the talk, but the free market walks the walk.

Capitalism as a function of self-interest and greed disperses money across a distributed human network. Socialism concentrates and controls capital by creating a single, centralized decision-making authority.

Albert DeSimone is a retired University of Georgia information technologist who resides in Bishop.