Greed, Conscience, and Big Government

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.

Here is the primary definition of greed, as given by The American Heritage® Dictionary of the English Language (from The Free Dictionary):

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.)

For a more thoughtful treatment of greed (properly avarice), I turn to the entry in the The Catholic Encyclopedia:

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.


Utilitarianism, “Liberalism,” and Omniscience

Utilitarianism is sort of under debate in the blogosphere (see here). But all the hifalutin’ philosophising misses the main point about utilitarianism: Those who practice it are arrogant pretenders to omniscience.

The appeal of utilitarianism rests on two mistaken beliefs:

  • There is such a thing as social welfare.
  • Transferring income and wealth from the richer to the poorer enhances social welfare because redistribution helps the poorer more than it hurts the richer.

Having disposed elsewhere of the second belief, I here address the first one.

The notion of a social welfare function arises from John Stuart Mill’s utilitarianism, which is best captured in the phrase “the greatest good for the greatest number” or, more precisely “the greatest amount of happiness altogether.” From this facile philosophy grew the patently ludicrous idea that it might be possible to quantify each person’s happiness, sum those values, and arrive at an aggregate measure of total happiness for everyone.

Utilitarianism, as a philosophy, has gone the way of Communism: It is discredited, but many people still cling to it under other names — “social welfare” and “social justice” being perennial favorites among the “liberal” intelligentsia.

How can supposedly rational “liberals” imagine that the benefits accruing to some persons (unionized employees of GM and Chrysler, urban developers, etc.) cancel the losses of other persons (taxpayers, property owners, etc.)? There is no realistic worldview in which A’s greater happiness cancels B’s greater unhappiness; never the twain shall meet.  The only way to “know” that A’s happiness cancels B’s unhappiness is to put oneself in the place of an omniscient deity — to become, in other words, an accountant of the soul.

It seems to me that “liberals” (most of them, anyway) reject God because to acknowledge Him would be to admit their own puniness and venality.

Greed, Cosmic Justice, and Social Welfare


We have heard much about “greed” in connection with the current financial crisis and recession. It seems that “greedy” lenders and financial intermediaries granted sub-prime mortgages to persons of low credit-worthiness and then infected the financial system by securitizing those risky mortgages and peddling them around to investors.

Why don’t we hear about the “greed” of the borrowers who entered into those sub-prime mortgages, and who enjoyed (and still enjoy, in most cases) better housing than they would otherwise have occupied. Why don’t we hear about the “greed” of the politicians who (seeking to curry favor and votes from certain groups) pressured Fannie Mae and Freddie Mac (and through them, mortgage lenders) to make mortgages more readily available to low-income borrowers (i.e., to make riskier loans)?

When does the desire to have more (e.g., a bigger house, a higher income) stop being the “American Dream” and become “greed”? Why is it good for a low-income person to inhabit a house that he can’t really afford but bad for a high-income person to inhabit a house that he can afford, and whose investments and entrepreneurship have helped the low-income person strive toward the “American Dream”?

The answer, of course, is that “greed” is whatever a politician, pundit, or other purveyor of economic envy says it is. “Greed” is invoked not to explain financial success but to denigrate those who have attained it (only to lose it, in some cases), as if they had attained it at the expense of those who have failed to attain it (thus far, at least). Except in the (relatively rare) cases of outright theft and fraud, financial success is not attained at anyone else’s expense; economics is not a zero-sum game.


The habit of castigating the motives of the financially successful and then penalizing their success by taxing them disproportionately appeals not only to envy and economic ignorance but also to what Thomas Sowell calls cosmic justice. The seekers of cosmic justice are not content to allow individuals to accomplish what they can, given their genes, their acquired traits, their parents’ wealth (or lack of it), where they were born, when they live, and so on. Rather, those who seek cosmic justice cling to the Rawlsian notion that no one “deserves” better “luck” than anyone else. But “deserves” and “luck” (like “greed”) are emotive, value-laden terms. Those terms suggest (as they are meant to) that there is some kind of great lottery in the sky, in which each of us participates, and that some of us hold winning tickets — which equally “deserving” others might just have well held, were it not for “luck.”

This is not what happens, of course. Humankind simply is varied in its genetic composition, personality traits, accumulated wealth, geographic distribution, etc. Consider a person who is born in the United States of brilliant, wealthy parents — and who inherits their brilliance, cultivates his inheritance (genetic and financial), and goes on to live a life of accomplishment and wealth, while doing no harm and great good to others. Such a person is neither “lucky” nor less “deserving” than anyone else. He merely is who he is, and he does what he does. There is no question of desert or luck.

Such reasoning does not dissuade those who seek cosmic justice. Many of the seekers are found among the “80 percent,” and it is their chosen lot to envy the other “20 percent,” that is, those persons whose brains, talent, money, and/or drive yield them a disproportionate — but not undeserved — degree of fortune, fame, and power. The influential seekers of cosmic justice are to be found among the  “20 percent.” It is they who use their wealth, fame, and position to enforce cosmic justice in the service (variously) of misplaced guilt, economic ignorance, and power-lust. (Altruism — another emotive, value-laden term — does not come into play, for reasons discussed here and here.)

Some combination of misplaced guilt, economic ignorance, and power-lust motivates our law-makers. (Their self-proclaimed “compassion” is bought on the cheap, with taxpayers’ money.) They accrue power by pandering to their fellow seekers of cosmic justice. Thus they have saddled us with progressive taxation, affirmative action, and a plethora of other disincentivizing, relationship-shattering, market-distorting policies. It is supremely ironic that those policies have made all of us (except perhaps politicians, bureaucrats, and thieves) far worse off than we would be if government were to get out of the cosmic-justice business. (See this, for example.)


Some proponents of cosmic justice appeal to the notion of social welfare (even some economists, who should know better) . Their appeal rests on two mistaken beliefs:

  • There is such a thing as social welfare.
  • Transferring income and wealth from the richer to the poorer enhances social welfare because redistribution helps the poorer more than it hurts the richer.

Having disposed elsewhere of the second belief, I now address the first one. I begin with a question posed by Arnold Kling:

Does the usefulness of the concept of a social welfare function stand or fall on its mathematical properties?

My answer: One can write equations until kingdom come, but no equation can make one person’s happiness cancel another person’s unhappiness.

The notion of a social welfare function arises from John Stuart Mill’s utilitarianism, which is best captured in the phrase “the greatest good for the greatest number” or, more precisely “the greatest amount of happiness altogether.” (See “Adler on Mill’s Utilitarianism” at the Adler Archive of The Radical Academy.)

From this facile philosophy (not Mill’s only one) grew the ludicrous idea that it might be possible to quantify each person’s happiness and, then, to arrive at an aggregate measure of total happiness for everyone (or at least everyone in England). Utilitarianism, as a philosophy, has gone the way of Communism: It is discredited but many people still cling to it, under other names.

Today’s usual name for utilitarianism is cost-benefit analysis. Governments often subject proposed projects and regulations (e.g., new highway construction, automobile safety requirements) to cost-benefit analysis. The theory of cost-benefit analysis is simple: If the expected benefits from a government project or regulation are greater than its expected costs, the project or regulation is economically justified.

Here is the problem with cost-benefit analysis — which is the problem with utilitarianism: One person’s benefit cannot be compared with another person’s cost. Suppose, for example, the City of Los Angeles were to conduct a cost-benefit analysis that “proved” the wisdom of constructing yet another freeway through the city in order to reduce the commuting time of workers who drive into the city from the suburbs. In order to construct the freeway, the city must exercise its power of eminent domain and take residential and commercial property, paying “just compensation,” of course. But “just compensation” for a forced taking cannot be “just” — not when property is being wrenched from often-unwilling “sellers” at prices they would not accept voluntarily. Not when those “sellers” (or their lessees) must face the additional financial and psychic costs of relocating their homes and businesses, of losing (in some cases) decades-old connections with friends, neighbors, customers, and suppliers.

How can a supposedly rational economist, politician, pundit, or “liberal” imagine that the benefits accruing to some persons (commuters, welfare recipients, etc.) somehow cancel the losses of other persons (taxpayers, property owners, etc.)? There is no valid mathematics in which A’s greater happiness cancels B’s greater unhappiness.

Yet, that is how cost-benefit analysis (utilitarianism) works, if not explcitly then implicitly. It is the spirit of utilitarianism (not to mention power-lust, arrogance, and ignorance) which enables Barack Obama and his ilk throughout the land to impose their will upon us — to our lasting detriment.