Recently by Arthur M.M. Krolman: OK, Gold’s Not Money. How About This One Ben: Is the Fed a Bank?
The ad starts with a prosperous grey-haired couple seated close at their kitchen table. “Oh, you’re bad!” the wife teases, rubbing his back. “And we’re already rich!”…”I know,” hubby admits focused on his notepad, “But think of the bigger yacht we can buy with all those happy customers forking over their money to get one of these new widgets I’m working on here.” He then turns to wink at the camera, “Thanks Greedeegra.” The voiceover concludes, “Ask your doctor about Greedeegra. Get a boost in your drive for prosperity and sail away to even more success.” The ad closes with a stunning sunset view of the yacht. “Get greedy. Get Greedeegra.”
Haven’t seen this one? So just why are there so many ads offering to help with one’s sex life but no little gold pill to alleviate shriveled greed dysfunction? Why is a lusty sex drive okay but a lusty prosperity drive is not? Greed, we are regularly told, is bad for the health, wealth and happiness of the human race. Why is greed an ugly inclination that one should strive to repress as much as possible? The answer is a shock to many: greed is not bad. Greed is good. Greed is an essential element to maximize the prosperity of every man, woman and child on the planet.
Of course statist types are immediately booing and hissing. But even fellow private property lovers will say, to my dismay, things like: “We can’t stop greed. We’ve always had greed. It’s not like a new scourge we can blame for the current depression.” These friends seem to carelessly toss in the greed-is-bad premise perhaps as a short-sighted appeasement to an eat-the-rich audience. Alas, what a corner for classical liberals to back themselves into! Greed is bad? Then the driven Misesian entrepreneur, he who more wisely allocates limited resources than his rivals and is richly rewarded along the way by his customer-overlords, he is bad too? Is this what is taught in universities today? Well, it is wrong.
What is greed? Greed is the focused drive to accumulate still more stuff when you’ve already got lots more stuff than “society”, sizing up your possessions, estimates you’ll ever “need”.
How is greed good for the human race? Even prudes will agree that sex drive is needed for the survival of the species. Lo and behold greed, the rich man's drive for even more prosperity, is likewise a crucial requirement for the future of human civilization. In three words, here's why: resources are limited. Because time and materials are limited, stewards of those resources who waste the least are the heroic saviors to achieve maximum human prosperity. Think about your favorite widget or foodstuff and how you happily trade with, and further enrich, the rich entrepreneur who is able to offer these heavenly things at such an attractive bargain year after year. Now think about what would happen were he to renounce greed, to renounce further self-enrichment, and to stop trading with you. Oh well, you might think, someone else can surely take his place. Perhaps a community enterprise. Perhaps your favorite things don't really need to be so heavenly. And perhaps you are willing to sacrifice some of your own prosperity to pay a little more. And then again, perhaps you're not too happy about it.
How does one entrepreneur come to be the steward of limited resources and not one of his rivals, or a community enterprise even? Because he is more wisely efficient and can thus pay a higher price, outbidding his rivals, to acquire the resource and still make a profit. So price is important in allocating resources? Price information is crucial. Hayek points out that without private property there can be no such thing as markets. And without markets there can be no such thing as prices. And without prices, resource allocation is chaos. Imagine a community property world when the community electrician volunteers decide to rewire the mayor's house for something to do. How would they know whether to use copper or silver? Rothbard tells us that Soviet planners depended on the prices printed in the Sears catalog to help with resource allocation! Accurate price information is key to enable accurate allocation of resources.
Is greed necessary in generating accurate price information? Yes. Greed is an essential "ingreedient" to generate accurate price information. Why? Think about accurate comparable sales data you might depend on when buying a house. Imagine if the realtor told you, "Here's the data. But just so you know, folk around here aren't too particular about being generous when bidding on a friendly house. You know…we're not a greedy bunch in these parts." How much would you rely on the data then? In a healthy market, the greedy buyer pays not more than he must to outbid competing buyers. And the greedy seller carefully reviews all bids and chooses the one that maximizes his prosperity. The result is accurate price information. And the same principle applies across all markets on earth.
"Your arguments are slick, Mr. Krolman. But I still think greed is bad," my sparring partner might respond at this point, "If you like greed, then you are just like a thief." To which I might reply, "If you like sex, then are you just like a rapist?" Let's be clear: sex and greed stand here and here. Violence slithers around over there. And in case you're wondering, I believe that the initiation of violence or threats of violence by anyone under any circumstances is despicable. Fair dimple-cheeked Greed stands above the scheming demons of Violence lying in the shadows at her feet.
"But you must admit that greed leads to violence." No I must not. With equal validity, you might argue that arguing leads to murder. And I would argue back: hogwash! And look, we're still alive! I love arguing. This is my greedy calculation: if I habitually murder my debating rivals, who will want to argue with me?
Perhaps greed is good in many circumstances, but surely greed should be moderated? No more than breathing should be moderated. What should reasonably be moderated is the daily, widespread excoriation of greed. We excoriate her to our peril. Instead, let's encourage more greedy entrepreneurs to allocate limited resources to maximize prosperity for all.
Perhaps universities should switch from passing out "degrees" to selling "greedees" – at a profit. Thanks Greedeegra.
