Ed Harrison has an excellent post over on his Credit Writedowns blog, following up and elaborating on his “Greed is Not Good” post here yesterday.
To whet your appetite, here it the beginning of “More on greed, regulation, Lehman and the financial industry“:
In one of my latest posts I said “greed is not good.” Quite frankly, I looked at this statement as self-evident in the wake of an economic catastrophe where greed was a defining element. Yet, a remarkable number of people commented in defense of greed; they seem to believe greed is a good thing. So, I would like to clarify a few things about greed in the context of the recent financial crisis and prudent regulation of the financial industry.
Greed is not good
Greed is defined as:
A selfish and excessive desire for more of something (as money) than is needed (Merriam Webster)
An excessive desire to acquire or possess more than what one needs or deserves, especially with respect to material wealth (Free Online Dictionary)
The selfish desire for or pursuit of money, wealth, food, or other possessions, especially when this denies the same goods to others. It is generally considered a vice, and is one of the seven deadly sins in Catholicism. (People who do not view unconstrained acquisitiveness as a vice will generally use a word other than greed, which has strong negative connotations.) (The Free Dictionary)
The obsession with accumulating material goods (Access-Jesus)
Do you notice the commonalities in all these definitions? Excessive, selfish, more than what one needs or deserves, unconstrained, obsessive. You can make the non-judgmental argument as I did that greed is neither good nor bad. But, in what twisted world view is any of this good? Greed is not ambition or hunger or drive. Greed is by definition excessive and unconstrained, and, thus, leads to unstable and suboptimal outcomes. Greed is not good.
Ed discusses how the free market ideology is a religion and serves to maintain the power of kleptocrats and why regulation is the least bad of the options available to deal with the concentrations of power that are inherent features of a stratified society. His post continues here.