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Friday, August 29, 2003

A Theology of Economics-Part II-Greed is-[Part one on Alabama's tax reform proposal is here] Richard Hall has been batting about the issue of capitalism the last week. In this post, he asks the question "...can anyone find anything in the teaching of Jesus that suggests I should be a 'maximiser of self-interest'? " Yes and no. Should you be selfish? No. Are you selfish? To the extent that you are still a fallen creature susceptible to sin, yes. One of the problems with a lot of secular leftist ideology is that they feel that mankind is perfectible with the right teaching; only through God can people be perfected, and then only party so in this world. There might be some in the Peanut Gallery who'd challenge me on the possible level of sanctification, but most of you will agree that even the saintly among us prefer more to less. People are naturally sinful and greedy. The presence of the Holy Spirit will minimize that nature, but our society as a whole is still greedy. While we are given the call to help the poor, we also need to reconcile ourselves to the idea that Joe Average is greedy. How then do we set up an economic system with fallen creatures? Capitalism does encourage greed, and often lying, as this one Rev. Hall post points out. However, a more socialist system also brings out some unsavory angels of our nature. If everyone makes the same amount, hard work holds little earthy reward, so laziness is encouraged. If politicians make decisions, and politicians and bureaucrats allocate goods, political power is prized. Effort will go into deciding how things get allocated rather than how to make more things. Creativity and diversity of ideas get sidetracked if there is no reward for new ideas. It isn't that "Greed is good", but that Greed is. People are selfish and we need to acknowledge that. Let's take a look at that Gordon Gekko speech from Wall Street in greater length
The point is, ladies and gentleman, greed is good. Greed works, greed is right. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed in all its forms, greed for life, money, love, knowledge has marked the upward surge in mankind – and greed, mark my words – will save not only Teldar Paper but the other malfunctioning corporation called the USA.
It isn't right, but greed does work. Greed gives people a reason to do something better, to make new products and to take risks on a new idea. Greed also gives people a reason to cheat, to make unsafe products if safety's too expensive, to pollute if cleaning it up is more expensive and to fire people if they aren't helping to maximize profits. However, a market-based system allows people to allocate resources well, since if there is an unmet market and there's money to be made, people will meet that demand. It may not be pretty. It may create the "creative destruction" of old business dying out to make room for newer, more efficient ones, but greed does work. A socialist system may be fairer, but it will tend to impoverish the population in comparison with a more market-oriented system. The goal of a more towards a market-oriented system is to reward people for good ideas, hard work and for investing in good ideas. Even though less is guaranteed, more is delivered to the community as a whole. A certain amount of redistribution of wealth is called for. However, at some point, the benefit from the government spending on the needy is overwhelmed by the effect on discouraging hard work and investment by lowering the take-home pay and after-tax profits of workers and investors. If more government spending makes us less affluent but happier due to more help for the needy, it is good. If it makes us both less affluent and less happy as a society, we have jumped the shark on the Byron Curve.

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