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Even if Greed is one of the instinctive motives of human behavior (like eating and sex), I hope Friedman is not suggesting that those should all be unrestrained and members of our society should not be expected to moderate those inclinations.
The seven deadly sins are described as such exactly because it is human nature to be inclined toward, anger, lust, gluttony, etc., but in excess they are destructive. How many of those does Friedman consider to be virtues?
Friedman, by the way, has been pretty thoroughly discredited by theoretical economists, and his basic principles that he espoused have generally failed. Which can be readily seen in the US model as it played out in Friedman's wake.
Greed is useful in a competitive environment, but not in a cooperative one. His assumption is based on the idea that cooperative economics cannot work, but the certainty of that is not at all clear.
Yes, Milton has been discredited - by the very economists like Greenspan and Bernecke, and the ones who told us, first, there was NO bubble, then NO recession, then that multimillion dollar bailouts would save the economy and save 250,000 jobs, and then that there were 'only' six per cent unemployment claims, the lowest in almost a year, last month. The same ones that say that we are now pulling out of the recession... oh, and Pelosi said that there 'might be' tax increases this year, based on these economists' projections.
Friedman has also been criticized by the polar opposite camp, like Klein and Krugman. The verdict, unanimous---he isolated and oversimplified his central point, and doggedly refused to allow for any gray areas. He used "markets" to fully explain everything, shouting down anyone who said "Yes,, but . . ." Every economist already knew the power and the value of the market in driving economics, but Friedmen, unrealistically, used that lever to disavow all other considerations. He ceased to be an exploratory economist, and used his personality and verbal skills to defend a single point of view which, though valid, was not as absolute as Newton's Laws of Motion.
Greed may indeed be good for pure economics, but does greed-based economics foster good social policy?
GREED per Webster's ... excessive or reprehensible acquisitiveness...
"Excessive, reprehensible," the terms themselves cast "greed" in a bad light. Now, competitiveness, free market, ambition, drive, not such bad words. In fact, would America be America without these qualities indicative to our national character? Would we be so big, so powerful, so safe? I'd say we would not have grown into our current, let's call it our past and now fading dominance, militarily, politically and economically. But America has always sought out a balance in our system, in our society. We have a graduated income tax, public schools, student grants and loans for those of humble means. The problem with unchecked greed is that it creates an uneven playing field. Why are there so many chains? How many small town businesses have been wiped out when a Wal-Mart moved in? And then, when big business gets so big it starts buying up D.C. to the point of widespread corp/govt collusion, the interests of the individual are only a consideration insofar as they don't interfere with those of Wall Street and K Street.
And look where it has got us. A 700 billion dollar bailout, a RE and mortgage company collapse, a health system that is an embarrassment, an education system that is criminal, a judicial system that affords justice to the haves over the have nots to the tune of, what is it now? 1-2 % of American men imprisoned, in a more and more privatized prison system? Yes, I think that America became America largely due to a system that enabled capitalism. But when the profit factor goes from being an important thing to the only thing, regardless of laws or ethics or simple empathy, then we are doomed. Unbridled greed hits every part of our lives. It's why quality and service are nosediving. It's why for every "real" movie they make, they make ten block busters. It's why music is "manufactured" and bland and just generally bad, and most importantly of all, because of Domino's and Pizza Hut's ability to undersell Sal and Angelo and Little Tony, it is why I haven't had a decent pizza in six months!
Can anyone claim that it is a better America we live in today than say just ten years ago? Can anybody attribute our downfall to anything other than the profit motive, especially profit of shareholders?
Greed is the engine that makes Capitalism go round and round. Without it, we might as well be Communists, because you need greedy entrepreneurs to start new businesses. Sure, there might be a small percentage of businessmen, bankers and investors that are in it for the good of society, but most of them are in it to make big bank. If they were not greedy, we would not all benefit from their drive to amass a fortune. The downside of greed is that those folks don't want to share, and contrary to some conservative beliefs, their greedy efforts seldom trickle down to the peasants.
The downside of greed is that those folks don't want to share, and contrary to some conservative beliefs, their greedy efforts seldom trickle down to the peasants.
Trickle down is the most laughable of all economic absurdities. A century ago, economists called it the "horse and sparrow" principle. If you feed a horse enough oats, there will be something left on the road for the sparrows to pick seeds from. They saw it for what it was: horse-sh*t.
Tricke down is used by people who lack the scientific acumen to understand that gravity is a very weak force in nature, quite unable to hold its own against application of even the tiniest effort to suck the wealth up in the opposite direction. In practice, we have a Sham-Wow economy. Everything gets sucked up and nothing trickles down.
Friedman, by the way, has been pretty thoroughly discredited by theoretical economists, and his basic principles that he espoused have generally failed. Which can be readily seen in the US model as it played out in Friedman's wake.
Sorry, this is not even close to being true. Friedman's seminal contributions came in the 1950s and early 1960s. His work should be judged from this context and context of a dysfunctional Global economy which dominated his early years. He work opened up avenues for future economists. His work with other Chicago economists challenged the dominant statist wisdom of the day. Finally he popular work written as he transitioned from academician to public figure are no less provocative.
His work remains highly influential, even if the 40 years of theoretical developments have refined and placed restrictions on the universal applicability of his results.
In fact, I would suggest, that his Capitalism and Freedom and Free to Choose (written with his wife), and the Road to Serfdom, from Friedman's Chicago colleague and fellow Nobel Laureate, FA Hayek, as required reading for anyone interested in economics.
Friedman's work in Monetary Theory is still be basis for how we operate the Federal Reserve. Some of Friedman's views on social welfare programs have ended up being simplistic. People aren't "profit maximizers."
Friedman's work in Monetary Theory is still be basis for how we operate the Federal Reserve. Some of Friedman's views on social welfare programs have ended up being simplistic. People aren't "profit maximizers."
Consumer theory and firm theory and other agent theory all have optimizing behavior as the benchmark. This was well before Friedman, see Samuelson's Foundations of Economic Analysis (1947) for an example.
I threads of all his work today, even if some are not longer worth mining.
S.
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