Is Capitalist Greed the Real Threat?

by Al Magliano

In our discussion of the dangers versus the benefits of "capitalist greed," let us start by imagining three types of societies:

Society A

This society is minimalist to the extreme, seeks ever fewer goods and resources, and commends dwindling productivity.

Society B

This society seeks precisely the same quantity of goods and services in perpetuity, no more and no less.

Society C

This society strives for the continual cultivation and transaction of ever more resources and services in its quest for prosperity.

To start, it is obvious that Society A would quickly perish as it systemically sheds resources and eventually starves to death or dies out due to lack of adequate shelter or some other necessity. Society B would perish as well, although it might take a little longer. If the quantity of goods and services always remained the same, natural population growth alone would be enough to destroy the society. As the population grew, each individual would be allowed fewer and fewer provisions until everyone starved to death or died from a lack of some other essential resource. Society C is therefore the only society that would have a chance at surviving, because its constituents strive to increase their resources.

From this, we can see how there is nothing wrong with the "collective greed" of our third society. Greed of this nature would actually be the only moral course of action if you want people to live and prosper, as the previous thought example shows all other conceivable alternatives lead to demise. So, enemies of "greed" must be referring not to "collective greed," but to some other phenomenon, such as:

1) "Zero-Sum Greed" (the acquisition of resources at the expense of someone else)

or

2) "Individual Greed" (greed practiced by the individual or by a singular entity such as a corporation)

Zero-sum greed is a form of greed that virtually everyone opposes, and rightly so. Two examples of this type of greed include fraud and theft. Fraud is the intentional perversion of the truth used to induce another to part with something of value. When the truth comes to light, it is revealed that the perpetrator's gain was predicated upon the victim's loss. Therefore, it is a zero-sum game. Outright theft is simply the distillation of this immoral practice. It is important to note that these offenses are already illegal and highly punishable.

Common fraud and theft, however, are not the only examples of one party acquiring resources at the expense of another. An additional example of this is welfare, of both the social and corporate kind. Social welfare is the use of coercive force to siphon resources from one socioeconomic group to another, typically less affluent socioeconomic group. If one opposes greed in the form of fraud and theft, one must logically oppose social welfare for possessing the same redistributive "zero-sumness." In fact, since independent auditing firms have demonstrated that up to 70% of social welfare funds are gobbled up by bureaucratic overhead before being passed on, this is actually far worse than just an immoral zero-sum game: it's stealing money and then flushing most of it down the toilet! Rooted in the same coercion, corporate welfare is equally abhorrent.

Moving on to the second idea of "individual greed," the existence of the State leads us to a comparison in two settings: the private sphere ("capitalist greed") and the public sphere ("socialist greed"). We note that, in the private sphere, all business is transacted voluntarily via the "market means." No one forces you to buy a particular product or pay for a particular service. You choose which individuals or corporations you want to trade with, and you can trade your money, your property, your time, your labor or any combination thereof. Therefore, we can see that "capitalist greed" is held in check by market forces of competition and remains accountable to the consumer, who may always take his business elsewhere. As Ludwig von Mises was fond of saying, "people vote with their pocketbooks."

In the public sphere, however, all revenues are acquired by force, also known as the "political means." Coercive political means include taxation, inflation, tariffs, fines, fees, regulations, etc. It is important to note that there exists no other entity which is legally allowed to tax you, print money, conscript you or create the laws. Therefore, the competitive market forces that keep capitalist greed in check are entirely absent. Given this simple truth, is it any surprise that taxes continue to rise every year, inflation and money-printing never abate, hundreds of thousands of pages of new regulations are continually passed, and the size of government only ever changes in one direction? It is for these reasons that socialist greed is the immoral form and the one we as individuals need to fear.

Finally, if one opposes capitalism due to the inherent greed and fallibility of man, one must logically oppose socialism. For would it not be run by the very same men, prone to greed and corruption? It is hard to argue this, unless we believe in things like "Divine Right" and that our caretakers are basically heaven-sent angels immune to the temptations of the rest of society. So, instead of fear-mongering about "capitalist greed" (the kind of greed that the consumer ultimately controls and the kind of nonzero-sum trading game that allows Society C to live and prosper), let us worry about and denounce all forms of "socialist greed," for socialist greed is greed at the point of the gun.