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). Voters’ greed encourages governments to spend more and tax less.
During the boom years, politicians and economists consistently underestimated greed’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 “greedy” 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, “the fight against greed” 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: it’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 sibling’s toy or slice of cake – but it often masquerades as a virtuous desire for deal that is “only fair”.