Quote Of The Day

Saying that “greed” caused today’s problems is like saying that gravity caused the death of someone pushed from the top floor of the Empire State building. Some things are sufficiently constant in human affairs – and self-interest, even greed, is among them – that they explain nothing. “Greed” certainly can be unleashed to do harm, but it can also be harnessed to do good. Any compelling explanation of any observed economic reality must take “greed” as a given while identifying the specific incentives provided by prevailing social institutions. If these institutions make serving the needs of others the best path to personal gain, then “greed” is harnessed for human betterment. But if these institutions make predating on others – either through force or fraud, or either intentionally or unintentionally – the best path to personal gain, then “greed” will indeed lead people to act destructively. In either case, though, it is the institutions and their accompanying incentives, rather than “greed,” that explain economic reality. ” —Donald J. Boudreaux, professor of economics at George Mason University

7 Responses to “Quote Of The Day”

  1. Karlo says:

    Nice quote. I would agree that greed doesn’t make for a very deep analysis. Of course, the institutional failures were created with greed as the motive. Along these same lines, I get annoyed when watching TV analysts talk about how the system “failed”. The system failed for me (indeed, I lost my entire life savings in the recent mess in spite of never having speculated on anything in my life and if things get worse, may be forced to drop out of the mainstream economy at some point), but the system didn’t fail for the people who amassed personal family fortunes. As someone who isn’t an economist, I’m much less concerned about all the magical happenings that occur in the black box called “the economy” and am much more concerned that a great deal of hard productive work seems to receive little (or no) reward while speculation receives fantastic returns. I’d much rather live in an economy that was dull and unexciting–and thereby allowed me to simply work and live my life–than in the high-rollers roulette-game we currently live in.

  2. Would you Karlo? I don’t think you would.

    Take Europe as an example. It is heavily more regulated, higher taxes, and more government involvement in the economy…as such, it has alot less up and downs…its economy is much less “dynamic” than ours.

    What are the results? The poor over there are just as poor as the ones here in the United States – except in one instance, minorities. Minorities are significantly better off in the United States than in Europe. Just to give you one indicator, our unemployment is so different that what is considered “bad years” for the United States is considered great years for European unemployment.

    In other words, no matter what economy you are in, the wealthy will always find a way to stay wealthy and the poor stay poor. The only difference is, atleast with a dynamic economy like the United States, you know you have that real chance of one day being the very rich.

  3. Karlo says:

    I personally don’t need a chance to be extremely rich. I don’t consider massive consumption of goods to be the goal of life. Moreover, I consider all modern economies to be fairly artificial systems so I don’t hold out the hope of some day returning to a golden age envisioned by Libertarians. A truly Libertarian paradise would probably be quite hellish (if it were possible) as it would require us to spend half our days paying the courts and lawyers in tort cases against our neighbors and then paying the local police to go after them. Since economies are artificial and since we’ve got a lot of bright people around, I don’t see why we can’t have people put together something that works better than our current system. We shouldn’t have to choose between Stalinism and the American plutocratic system.

  4. I don’t think a libertarian world would be the best either…but I do think that if we are to look for a better system, we should start off with looking at what makes the United States unique and improve on that. Things like less government, lower regulations of the labor force, lower taxes and an overall system that encourages innovation and technology are the paths that show the most promise, IMHO.

  5. gsarcs says:

    Amen H-Pundit! I lived in southern Italy and observed first hand how tough it is for the poor and particularly for minorities. I agree that we should and can improve on the things that make the USA unique, but at the same time we should also appreciate the opportunity to acquire the trappings of a better life. It is far easier in this country even with the present circumstances.
    The people that I got to know and became friends with while living there lived very very modest lives. They accepted their circumstances because upward mobility was very hard.
    The wealthy in Italy manage to stay wealthy, the poor stay poor with few opportunities to make significant advancements. By the way, I grew up quite poor in a migrant laborer family. I know poverty up close and personal. But I also know that I have had incredible oppportunities and my life is and has been incredibly fortunate. Coming back to the good ol’ USA made me appreciate my life in ways that I took for granted.

  6. Karlo says:

    There’s now a fairly large body of research that says that the U.S. has less upward mobility than many European countries. In many countries, the educational system (just to give one example of a mechanism of upward mobility) is much cheaper and entrance is much more closely related to grades on tests, so education serves as one way that the average person gets ahead. I’ve also lived abroad for about half my life and have traveled extensively. Many places I’ve been (e.g., Japan, Australia, etc.) seemed to be pretty egalitarian.

  7. That’s why I’m a big proponent of vouchers. 😉

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