The financial crisis of 2007-2008, which led to the Great Recession, has been blamed on several things. Financial institutions are leading scapegoats. In particular, there were the retail institutions that lent money at low interest rates (made so by the Fed) to high-risk borrowers (in keeping with government policy), and there were the Wall Street institutions that “poisoned” financial markets by securitizing bundles of high-risk mortgage loans.
In both cases, the institutions are said to have been “greedy” in pursuit of greater profits. That “crime” (which is only a “crime” when someone else commits it) was in fact “committed” in ways that were perfectly legal and passed muster with government regulators. In sum, the financial crisis and subsequent recession were deeply rooted in government failure — not “greed.” For chapter and verse, see Arnold Kling’s monograph, Not What They Had in Mind.
Nevertheless, greed is often blamed for the financial crisis and its aftermath. Why? Because it’s a simple, mindless generalization that plays into the left’s perpetual campaign against “the rich” — a.k.a. biting the hand that feeds them. And it’s certainly a lot easier for ignoramuses (leftist or otherwise) to parrot “greed” than to seek the truth.
With that out of the way, let’s take a closer look at greed and its antecedent, avarice.
An excessive desire to acquire or possess more than what one needs or deserves, especially with respect to material wealth.
What about “avarice”? Here is the primary definition from the same source:
Immoderate desire for wealth; cupidity [another word for the same thing].
To call a person (or institutional collective of persons) “greedy” or “avaricious,” one must make normative judgments; that is, the person’s (or collective’s) desire for (material) wealth must be deemed “excessive” or “immoderate” or more than he “deserves.” When I consider the affluent leftists in the academy, the media, and government who make such judgements when they proclaim the “greediness” of bankers (but not film stars or professional athletes), my thoughts turn to John 8:7 — “Whichever of you is free from sin shall cast the first stone….” (It is telling that Paul Krugman, an undeniably affluent leftist, seeks — and fails — to avoid seeming hypocritical by focusing his attacks on persons in the top 0.1 percent of the income distribution.)
Avarice (from Latin avarus, “greedy”; “to crave”) is the inordinate love for riches. Its special malice, broadly speaking, lies in that it makes the getting and keeping of money, possessions, and the like, a purpose in itself to live for. It does not see that these things are valuable only as instruments for the conduct of a rational and harmonious life, due regard being paid of course to the special social condition in which one is placed. It is called a capital vice because it has as its object that for the gaining or holding of which many other sins are committed. It is more to be dreaded in that it often cloaks itself as a virtue, or insinuates itself under the pretext of making a decent provision for the future. In so far as avarice is an incentive to injustice in acquiring and retaining of wealth, it is frequently a grievous sin. In itself, however, and in so far as it implies simply an excessive desire of, or pleasure in, riches, it is commonly not a mortal sin.
I take two key points from this definition:
- Acquisitiveness is bad when it becomes an end in itself, so that one becomes neglectful of family, friends, associates — and God.
- Acquisitiveness is bad when it is abetted by deeds that do harm to others (e.g., thieving, cheating, and lying).
In sum: Acquisitiveness isn’t bad per se, and it may be good if it has good effects (e.g., the dispensation of charity, investments in job-producing capital). The potentially bad effects of acquisitiveness are what may make it bad. But the vice of avarice arises only when the bad effects arise.
But the judgment as to whether a person is guilty of avarice is the person’s. No human being can peer into the person’s conscience and say that he acts avariciously. This is not to excuse the person who simply forges ahead in life without examining his conscience. Such a person fears and refuses self-examination because he knows that he is doing wrong. The refusal to confront error is an admission of error.
Consider statist politicians, rule-writing bureaucrats, and the masses of voters who applaud and support them. The latter are avaracious for material goods that they haven’t and won’t earn by their own efforts. (They are spurred by more than a little envy, as well.) Their material avaraciousness is served by the lust for power (and material goods) that is endemic among politicians and bureaucrats, and their cheerleaders in the academy and the media.
Do these avaracious classes ever have more than a passing qualm about how they wield their vast power over the populace as a whole? I doubt it. Instead, they rationalize what they do by pointing to the good results that they expect to flow from various government programs, regulations, and transfer payments. They are ignorant or heedless of the mountains of evidence about the bad results that actually obtain — welfare dependency, fatherless homes, the huge economic costs of regulation, and diminished economic growth, for example. Their avaraciousness blinds them to facts, of which a small sample can be found here. (For much more, see the posts at this link and every issue of Regulation back to its inception in 1977.)
What might they find if they were to the face those facts and examine their consciences? This, if they are diligent:
- I don’t like others to lie to me, cheat me, or steal from me. Nor do I like being told how I should live my life, especially if I’m not acting in harmful ways.
- In those respects, I am like most of my fellow citizens.
- I have no idea which of them, individually, is a liar, cheater, thief, or petty tyrant. Most of them are not all of those things, and few of them are any of those things on a significant scale.
- Except when it comes to tyranny. Yes, there are many people in business and government who act like petty tyrants toward their subordinates. But those subordinates have the option of finding other jobs if their supervisors continue to tyrannize them.
- As a citizen, however, I have no practical choice but to pay the taxes demanded of me by government and to obey its rules, even when those taxes support programs of which I disapprove and those rules are unjust and economically damaging.
- When I use the power of government to get what I want, or to make others act as I wish them to act, I am nothing but a petty tyrant who abets the infliction of harm on others.
- And a thief. Because government takes money from people who do me no harm.
- And if government acts like a petty tyrant and thief toward others, it must be doing the same thing to me, on behalf of many of those others.
- The Golden Rule says “do unto others as you would have them do unto you.” I haven’t been living by that rule, nor have a lot of my fellow citizens. If I begin to live by that rule — begin to demand from government only what it owes me, which is protection from predators — perhaps others will follow my example.
- And even if they don’t, I will have a clear conscience.
- P.S. I didn’t mention envy, but I should have. It’s an unattractive trait, and when acted on it can cause harm. For example, I don’t envy highly-paid athletes and movie stars, despite the huge incomes they earn. But I seem to envy highly-paid managers and bankers. Perhaps that’s because I’ve been told so often that the rules of the economic “game” are rigged in favor of highly-paid managers and bankers.
- That may be true, though it’s hard to tell given the long history and complexity of various laws and regulations. But most of the people who benefit from the “rigging” had nothing to do with it. It was done by politicians and bureaucrats. So the real solution is to undo the complex laws and regulations that support “rigging,” it isn’t to punish hard-working people by taxing them exorbitantly.
- And while I’m thinking of politicians and bureaucrats, I must mention that they’ve done a very good job of rigging the system in their favor, with salaries, benefits, and pensions that most of them couldn’t command in the private sector. (The affluence of the Washington DC area is an insult to hard-working taxpayers.) The solution is obvious: Cut the bureaucracy that generates the rules that distort and discourage economic activity, and find ways to compensate politicians and bureaucrats according to the value of the private-sector jobs for which they actually qualify.
- I wonder how avaracious politicians and bureaucrats sleep at night. That sounds judgmental, and I’m aware of the admonition “Do not judge others, or you yourselves will be judged” (Matthew 7:1). But in view of their demonstrated greed, I have no qualms about judging them.