Is Greed good?

[Blue_Sargasso]

I always liked the 'Greed is good' speech in Wall Street. Yet I found it simplistic. Surely it's not an all or nothing thing. To eliminate greed, as Communism attempted to do, was a disaster. Yet to allow uncontrolled greed, as free market capitalism advocates, is almost as bad. The current financial mayhem is purely and simply attributable to unrestrained greed.

Should nations allow excessive greed or should they adopt a nuanced approach? Should governments and national banks have a decisive say in the salaries and incentives that are set by banks and businesses i.e. should they actually be involved in setting appropriate remuneration rates across all industries? This would not be consistent with free markets, but it would certainly be consistent with their remit of controlling inflation.

So, greed - up to a point - is good, but not when it gets out of control (as it so easily does).

Should governments control business greed? Should they introduce salary caps? What's wrong with salary caps? Can a person who is allowed to earn only two million dollars a year rather than four million actually have grounds for complaint? When does greed become toxic?

[paximperium]

Should governments control business greed?
I have no idea how the governement would ever be able to control so-called "business greed". Anyway, it is already being done otherwise we wouldn't have anti-monopoly laws, environmental or food laws etc. in place.

Should they introduce salary caps? What's wrong with salary caps?
No. Because it will not work. It will just lead to talent going elsewhere or other payoffs.


Can a person who is allowed to earn only two million dollars a year rather than four million actually have grounds for complaint?
Yes. Why shouldn't he or she complain if they are not receiving pay for what their services are inherently worth? Steve Jobs is worth millions compared to the biilions that he has brought to Apple.

Granted much of the multi-million dollar payouts are ridiculous but that's for companies to decide, not the government.

When does greed become toxic?
When it becomes detrimental to the majority. But you are mixing up greed with free market salaries which is a different issue entirely.

[Francesca R]

I always liked the 'Greed is good' speech in Wall Street.Greed is a subjective term, mostly used perjoritavely. The definition usually conjures up the notion of wanting to acquire wealth "for the sake of it" and/or "beyond one's needs".

Yet I found it simplistic. Surely it's not an all or nothing thing.And no it is not usually "all or nothing" in that you would find people singularly motivated by this (and nothing else) or wholly indifferent to acquiring wealth. Maybe in rare exceptional cases.

To eliminate greed, as Communism attempted to do, was a disaster. Yet to allow uncontrolled greed, as free market capitalism advocates, is almost as bad. What "free-market capitalism" is this? In most capitalist societies, the capacity to "want" stuff is not checked (how can it be--other than via brainwashing), but the ability to prevail in acquiring stuff is controlled in many assorted ways. Just not in every way.

The current financial mayhem is purely and simply attributable to unrestrained greed.Incorrect. The desire for the pursuit of wealth plays an important part but not the only part (see below). Conversely, the desire to pursue wealth also explains the presence of your butcher, brewer and baker (per Adam Smith), so the permission to be "greedy" is not all bad, no?

Should governments and national banks have a decisive say in the salaries and incentives that are set by banks and businesses i.e. should they actually be involved in setting appropriate remuneration rates across all industries?No except via progressive tax codes. Government intervention in the price-setting mechanism indicates either superior knowledge (doubtful) or a reduction in economic efficency (more likely). In almost every case I would be able to argue that a more efficient outcome could be obtained using transfers (like tax) whilst still preserving whatever was deemed socially desirable about the capping idea in the first place.

This would not be consistent with free markets, but it would certainly be consistent with their remit of controlling inflation.Incorrect unless government price control was extended to cover all non-salary forms of income, and by implication, all prices in the economy.

When does greed become toxic?When it is not coupled with various other very desirable (essential) structural features of capitalism:

1--Social and political preconditions like rule of law, sanctity of contracts, transparency in commercial trading, protection of intellectual and real property rights.
2--Economic and market preconditions like competition, elimination of externalities, complete hedgability of risks, diminishing returns to scale, risk aversion
3--Credible government intervention for regulating leverage and monetary and fiscal policies, redressing of non-market externalities. and distributional equity as preferred by society.

(1-3) is an aspirational list on which I would argue it is the goal to obtain as high a score as practical.

[a_unique_person]

I always liked the 'Greed is good' speech in Wall Street. Yet I found it simplistic. Surely it's not an all or nothing thing. To eliminate greed, as Communism attempted to do, was a disaster.

All it did was shift the greed.

[Puppycow]

The current financial mayhem is purely and simply attributable to unrestrained greed.

In what sense? It could also be due to a miscalculation of risk, no? Why would greedy people be more likely to make bad investments? In capitalism you are rewarded for being smart and greedy, not just greedy.

Also, I think there is a distinction to be made between destructive greed and constructive greed. Stealing is destructive, making something valuable is constructive. The latter is "good" greed.

[I Ratant]

There's greed for filthy lucre, but many people are greedy for power!
The perks with power are as addictive as unlimited wealth.
Religions tend to attract these people, who work within the "poverty" myth to build personal empires.
And the leaders of socialist ideologies seem to accumulate the perks as well, both power and wealth.

[The Central Scrutinizer]

I always liked the 'Greed is good' speech in Wall Street. Yet I found it simplistic. Surely it's not an all or nothing thing. To eliminate greed, as Communism attempted to do, was a disaster. Yet to allow uncontrolled greed, as free market capitalism advocates, is almost as bad. The current financial mayhem is purely and simply attributable to unrestrained greed.

Should nations allow excessive greed or should they adopt a nuanced approach? Should governments and national banks have a decisive say in the salaries and incentives that are set by banks and businesses i.e. should they actually be involved in setting appropriate remuneration rates across all industries? This would not be consistent with free markets, but it would certainly be consistent with their remit of controlling inflation.

So, greed - up to a point - is good, but not when it gets out of control (as it so easily does).

Should governments control business greed? Should they introduce salary caps? What's wrong with salary caps? Can a person who is allowed to earn only two million dollars a year rather than four million actually have grounds for complaint? When does greed become toxic?

Problem #1 - define "greed".

[dudalb]

There's greed for filthy lucre, but many people are greedy for power!
The perks with power are as addictive as unlimited wealth.
Religions tend to attract these people, who work within the "poverty" myth to build personal empires.
And the leaders of socialist ideologies seem to accumulate the perks as well, both power and wealth.



Just compare to the why the high ups in the Communist Party lived in was a major reason
so many people..including me...decided that Marxism was a load of crap.
Not that there were not many other equally valid reasons for that. Little things like The Gulag, Mao's "reeducation" camps and the "Cultural Revolution" Pol Pot's fun little regime in Cambodia, etc.
Greed seems to be a basic part of human nature, which is why "From Each According to His Ablilties, To Each According To His Needs" will never ,ever work in real life no matter how nice it sounds on paper.
The question is how do we keep greed from getting out of hand and causing the free market to self destruct. This is why I am not a Libertarian, I think you need some regulation to keep the machine from overheating and blowing up.

[soylent]

Problem #1 - define "greed".

"reprehensible acquisitiveness"

"excessive desire to acquire or possess more (especially more material wealth) than one needs or deserves"

Slippier than hagfish.

The common definition from people's usage of the term appears to be that self-interest is greed if it is perceived as hurting the interests of someone or something we like.

[UnrepentantSinner]

The common definition from people's usage of the term appears to be that self-interest is greed if it is perceived as hurting the interests of someone or something we like.

Like the environment or the world we leave for our progeny or do you mean stuff like outsourcing?

[El Greco]

Greed is bad when it conflicts with our instincts of caring for other people.

As far as a particular society is concerned, this means that greed is bad when you deprive other people of so much that a riot is pretty probable :D