5.13 Is Greed Bad?
We all know that being greedy and not sharing with our friends is bad. however there is another kind of greed that can be good and that is wanting nice things for yourself and your family and trying to get those things. It's a greed in which you act in your self interest. That kind of greed can not only make your life better but it might make the lives of others better as you do the work to get the money to get what you want.
Ivan Boesky became rich on the stock market. He made a speech to the graduating business class of the University of California at Berkeley in which he said"Greed is all right, by the way. I want you to know that. I think greed is healthy. You can be greedy and still feel good about yourself.” A movie called Wall Street was made in which Gordon Gekko, a wealthy businesman made a speech based on Boesky's speech. The speech is embedded below.
Mr. Gekko mentions evolution and survival of the fittest. Survival of the fittest is when life forms that are better at surviving survive while those life forms that aren't as good at competing for food or defending themselves, don't. Mr. Gekko sees that as a good thing in the world of business. He sees the survival of the fittest most efficient business as good. The more efficient a business is the cheaper and better the products it can make and that benefits the consumer. A competitor company might not be able to compete and might go out of business as a result but Mr. Gekko doesn't see that as a bad thing.
What about when a company pays its employees as little as possible and most of the money goes to the people who run the company? If they do that in a free market another company is likely to come along that will offer more to the workers with the result that the workers leave the company that doesn't pay them enough. What if there are so many people looking for a job that some will work for low pay because otherwise they get no pay? They are still better off than when they were when they received no pay. Most governments impose very high taxes on the people running the company who make a lot of money and those taxes are supposed to pay for programs that benefit everyone.
In the video below Geraldo Rivera a former talk show host, asks Milton Friedman about capitalism and greed. Geraldo recognizes that desires for materials things is part of what drives people to make money in capitalist societies. The alternative to capitalist societies is government ownership of everything. We need to understand when we watch this what Milton Friedman means by greed. To many people greed means acting in one's self interest even if it hurts others. Milton Friedman's definition is just acting in one's self interest. When Milton Friedman defends capitalism he is not arguing that people should hurt others. He argues that capitalism benefits everyone.
Why not relax and rely on the government to feed you? We can learn the answer from the story of the ant and the grasshopper.
Click Here for the fable of the Ant and the Grasshopper
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