Vigilant Investments Advisors, LLC.

Is Greed Good?

Recently much has been said about the "greedy Wall Street crooks" with the intent of gathering a group of like-minded people and hunting this category of criminal.  This discussion reminds me of a set of questions asked of Milton Friedman about greed.

The question was asked,"As you look out at the in-equality that exists in the United States, with so much difference between the "haves" and the "have-nots" did you ever have a moment of doubt about capitalism and whether greed is a good idea?"

His response was classic,"First of all, tell me, is there some society that you know of, that doesn't run on greed?  Do you think Russia doesn't run on greed.  Do you think China doesn't run on greed?  What is greed...... The world runs on individuals pursuing their own seperate interests.  The great achievements of the world have not come from governments.  The only cases in recorded history in which the masses have escaped the kind of grinding poverty that exists in the world...the only cases in recorded history is where there has been capitalism and largely free trade.  The record of history is absolutely clear, that there is no other way for improving the lot of ordinary people, so far discovered, that can hold a candle to the great productive activities that are unleashed through capitalism and the free enterprise system."

The follow-up question came,"But capitalism doesn't reward virtue as much as it rewards an ability to manipulate the system."

Dr. Friedman responded, "And what does reward virtue?  Do you think the Communist Commisary rewards virtue?  Do you think that Hitler rewarded virtue?  Do you think American Presidents reward virture?  Do American Presidents choose their appointees based on virtue or based on their political clout? Is it really true that political self-interest is more noble than economic self-interest?  I think you are taking a lot of things for granted..."

With the help of Milton Friedman, now back to the original question...Is Greed Good?

In the echo of Dr. Friedman, the world runs on individuals pursuing their own seperate interests.  In a form of combination, some pursue primarily economic self-interest and some primarily pursue political self-interest.  It seems that in the United States we have a large number of people pursuing their own self-interests at the expense of others' interests.  Because of the economic downturn, it just so happens that we are watching the politician's self-interests gaining ground at the expense of many types of economic self-interest.  What started on Wall Street will grow to the auto-manufacturers, insurance companies, real estate industries, health-care providers and our educational systems.

Clearly, there is a group that is being greedy, is it Wall Street or Washington?