'Greed' Is a Convenient Scapegoat

Wednesday, 24 Oct 2012 04:42 PM

By John Stossel

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On TV, my Fox colleague Bill O'Reilly says, "The recession was brought on largely by greedy Wall Street corporations."
 
Give me a break.
 
Bill's smart. If he believes such things, we who care about freedom have done a poor job communicating economics.
 
Blaming problems on "greed" is a mindless cliché.
 
Yes, Wall Street was greedy — but that's nothing new. Greed is a constant. Did you ever turn down a raise? We need a free market because it restrains greed. Laws against theft and fraud help, but competition does more. With this election approaching, and statist, eager-to-regulate candidates in ascent, we need more Americans to understand this.
 
The statist left says it's government's job to protect consumers and help poor people. But greed — more precisely, the pursuit of self-interest in the free market — would work better.

The market (if not corrupted by corporate welfare and bailouts) harmonizes the interests of diverse people who don't even know each other and might not even like each other. It motivates them to work hard to serve customers.
 
When markets are free (alas, ours is not; in America today, too often people "partner" with politicians and get rich through government), those who charge too much, or skimp on quality or service, lose money to competitors who serve people better.
 
What could be more humane? Nothing has done more than markets to lift people out of the mud and misery of primitive life.
 
But progressive blogger Sally Kohn argues: "We all have a little greed in us. The question is, what values do we hold alongside greed as a society . . . so that we operate for the better good of everyone?"
 
What values? My vision of the "better good" may be different from hers. I don't want government to decide for me.
 
"Property rights constrain self-interest," libertarian economist Donald Boudreaux pointed out. "We're all self-interested. We care more about ourselves, our family, and our loved ones than we care about strangers . . . The problem with government is that it is the institution that best allows people to grab more than what they deserve."
 
That's what happened under communism — and increasingly, it's happening in America. As Joseph Sobran put it: "'Need' now means wanting someone else's money. 'Greed' means wanting to keep your own. 'Compassion' is when a politician arranges the transfer.'"
 
This is a threat to freedom and the route to stagnation.
 
Kohn rightly objects to "crony capitalism facilitated by government," but goes on to highlight government's "positive side . . . values of community."
 
Whoa! "Community" is a loaded word. Statists misuse it to criticize individualism, as though the two don't coexist, as if, without government, people don't work together. But this is nonsense.
 
Real communities emerge organically from individuals who volunteer to come together for common purpose. Communities are not created by government edict, which amounts to a threat of violence against peaceful people.
 
As classical liberals like Herbert Spencer and F.A. Hayek taught, there is no conflict between individualism and social cooperation. These are two sides of the same coin of freedom. Individualists form families, clubs, charities, churches, and softball leagues, and participate in thousands of voluntary communities.
 
But what about the poor? Kohn said government is needed to assure equality, just as parents make sure a cake is not unfairly divided among family members.
 
"The reality is . . . we have fixed resources."
 
But we don't have fixed resources! Thanks to economic liberalization, 7 billion people on earth live better than ever. Poverty decreases. That should prove we don't have fixed resources.
 
Rather than one cake or a fixed supply of cake, greedy entrepreneurs — like Bill Gates and Steve Jobs — make more and bigger cakes. Everyone gets richer. The producers, however greedy, are heroes.
 
Inequality is a product of freedom. When people are free, some will acquire much more than others. Forty years of reporting taught me that letting the wealthy indulge their greed protects consumers and helps poor people much more than government programs do. Just keep them away from government power.
 
The pursuit of self-interest — greed, if you will — benefits everyone. We should free the market and enjoy the prosperity.
 
John Stossel is host of "Stossel" on the Fox Business Network. He's the author of "Give Me a Break" and of "Myth, Lies, and Downright Stupidity." Read more reports from John Stossel — Click Here Now.
 

 
 
 
 
 

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