Greed, justice and deception
Greed contributes to all the economic and financial woes of prosperous societies. The United States and other rich countries produce much more than is needed to support all of their people in comfort, so if desires were all truly modest, there would be few problems. Greed encourages people to decide that their own share is too small. Greed influences the popular desire for GDP growth (more, faster), financial gains (higher house prices as a human right) and total economic security (guaranteed pension, come what may). Votersâ€™ greed encourages governments to spend more and tax less.
During the boom years, politicians and economists consistently underestimated greedâ€™s disruptive power. While few endorsed the extremist view that greed is actually good, even fewer acted as if it were dangerous. The rhetoric changed during the crisis. It has become fashionable to add â€śgreedyâ€ť to the description of any unpopular group – bankers, highly paid executives, rich people in general, welfare cheats.
In theory, the entry of greed into the public discourse ought to be helpful. If those subject to immoderate desire could be identified with certainty, then society might take up arms against them. While we might never win the battle, we could at least hope to shame and restrain the malefactors.
As a political agenda-item, though, â€śthe fight against greedâ€ť has a big problem; greed is much easier to identify in other people than in ourselves. The current debate on raising U.S. taxes on the very rich is typical. Few people have any doubt over who is being greedy about the tax system: itâ€™s someone else. Yes, there is the odd Warren Buffett, a multi-billionaire who thinks he is under-taxed. However, the tiny platoon of the self-accusing is up against two large armies of the self-justifying. The privileged force, small but powerful, is certain that the government is already getting at least a fair share of their incomes. The poor, the middle class and the old, who make up the much larger tax-them-more brigades, fight among themselves, but they are all certain that their motivation is justice, not greed.
The problem is profound, and not merely economic. In all domains, greed can be crude – think of a toddler reaching for a siblingâ€™s toy or slice of cake – but it often masquerades as a virtuous desire for deal that is â€śonly fairâ€ť.
Lest I be accused of hypocrisy in this matter, I will accuse myself first of all. For example, a few months ago I decided that Reuters.com had not given my weekly column its fair share of attention. I sent off an indignant missive, explaining that I did not want special treatment, only what justice demanded. In reply, my editor said that he received many similar complaints from writers, but was still waiting for one about having too much display on the website. Had I thought to protest the injustice to my peers when I thought they were short-changed? The answer: of course not. I would not have noticed that imbalance, because my supposed sense of justice was essentially selfish. It was greed, in this case for attention, dressed up as righteousness.
I am not alone, of course. Greed distorts everyoneâ€™s perceptions and judgements. The rich are particularly easy targets in a society which is theoretically committed to equality. Consider how bankers responded to their boom-time bonuses – almost all measured in the hundreds of thousands of dollars. On most trading floors the mood on announcement-day was funereal. To a man (there were few women traders), they were persuaded that their rewards were unjustly low. Only members of their charmed circle could possibly see anything other than greed at work.
However, the temptation to feel hard done by is not limited to the rich; it is universal. The welfare state with its entitlements culture has helped propagate disguised greed among the poor; the inflation of house prices did the same for the middle classes. If bankers were greedy when they lent excessively to homeowner-speculators, the borrowers were at least as greedy when they signed on for loans they could not afford to repay. The rapid increase of medical costs, for rich and poor alike, is best explained by disguised entitlements-greed in a domain where justice can easily be invoked to demand the prolongation of life at any cost.
Greedâ€™s subtlety explains why its entry into the post-crisis rhetoric has not actually clarified the debate. It is universally assumed that greed only affects other people, so the concept is used solely to insult opponents. It could be a helpful tool for reaching a common understanding of the failings of our characters, customs and institutions. After all, individuals who examine themselves carefully usually uncover hidden depths of greed, and this self-criticism can reduce their susceptibility. An open and humble debate could do the same for our prosperous society.