Written by Julian Modiano   

Greed is good. It’s funny how an entire economic system – capitalism – seems to have been reduced to those three words. Those who hate it say that greed can’t possibly be good, because it’s a ‘bad’ emotion, it brings out the worst in us, and necessarily leads to fraud and dishonesty. The few who actually support it – and, mind you, they are a very small minority, contrary to popular belief – believe that greed is indeed good. It might seem ‘bad’, but in practice it’s everyone’s self interest that has tended to maximize productivity. What this idea might seem to suggest, and which is in fact the cause of so much hatred of real, free market capitalism by almost everybody, is that in a capitalist society, the greediest bastard is the most successful.

That idea isn’t always true. Of course, there is little doubt that the (intelligent) industrialist, propelled by his greed for money, will make the most material gains. But it’s not at all true that only greed is rewarded, and it is certainly not true that any greed is rewarded. Criminals and thieves are very greedy, and yet in a capitalist society they would be punished for stealing property. And since fraud is one of the few things that should remain illegal, greedy businesses trying to make easy profits couldn’t deceive consumers without being taken to court, although either way it is most likely that businesses that did commit fraud on a regular basis and somehow managed to continually evade the law wouldn’t last very long, since, in a deregulated system, non-fraudulent competition would easily outcompete them as soon as people realized what was going on.

No, greed wouldn’t necessarily be rewarded. What would necessarily and always be rewarded – and this is the true beauty of the system – is producing something that is of value to someone else. The people that would benefit the most (materially) from a capitalist society are those that are best able to predict what people want, and then deliver it to them. Sure, your aim is selfish: to make yourself rich. But there is only one way you can make money in a society based on voluntary trade, and that is to produce something that makes other people happy. That, I think more than anything else, is what is truly incredible. In a free society, the only way someone could become a multi-billionaire is by satisfying the wants of millions of people. By understanding what society is missing, and then delivering the missing pieces. Funny enough, the truth is that the greatest material rewards would come to the greatest people-pleasers.

There is a myth that in the exchange of goods between two parties, only one can gain. That corporations are evil because they make ridiculous profits selling things to poor consumers. But in a voluntary transaction, both parties always benefit. One might benefit, materially, more than another, but money isn’t the only measure of profit. There is a widespread idea that if I buy an iPod, I have lost $150 (or whatever an iPod costs these days), and Apple has profited $150. But nothing could be further from the truth! The truth is that I have made a ridiculous profit from buying an iPod. I love listening to music everywhere I go on a tiny device that fits in my pocket, and having one has improved my quality of life tremendously. In fact, I would go so far as to say that between me and Apple, I got the bigger slice of the pie. Sure, I’m down $150, but to be honest, my iPod that I’ve carried around with me for the past 6 years has given me much more than $150 worth of pleasure. I have profited a lot more than apple – because I would have been willing to spend significantly more than $150 to buy one. Although in truth that too is a fallacy, because value is subjective. In my perspective, I have profited more, because an iPod is worth more to me than $150. In Apple’s perspective, they have profited more, because an iPod is definitely worth less to them than the $150 I gave them. Since value is subjective, both parties make the greater gain.

Oddly enough, those who hate capitalism the most (and the supposed materialism that comes with it) fail to see anything except for money as being of value. If, like many of them like to say (and I tend to agree), money isn’t important, it isn’t everything – what’s the problem? The greedy pigs are being rewarded with money, and yet that has nothing to do with success. There are much more important things in life, so they’re just fooling themselves! They’re making money, while the people are gaining good and services – things that actually matter! The truth is that success is a completely subjective word, and one cannot possibly decide who is the most successful in society. Because one’s success is completely relative to one’s own aspirations – and yes, it could be that someone evaluates their own success based on their material wealth. But there are many people who were undoubtedly successful whilst having little or nothing. People like Gandhi and Mother Theresa, who were clearly ‘successful’. Saying that in capitalism only the greediest are successful is saying that money is the only estimate of success, and that anybody who is poor is a failure.

It is an interesting paradox how those who hate materialism the most are usually the most materialist of all. People who are unable to understand that there are other measures of success, other measures of wealth, and that just like Gandhi’s poverty was no hindrance to his success, it need not be for anybody. That is one of the greatest advantages of capitalism: it allows everybody to measure their own success based on their own values.

Many people don’t understand how such a society would be possible. If the government doesn’t decide certain things, then how on earth could anyone possibly ever reach an agreement? If the government doesn’t step in now and then, who’s going to make all the decisions? Usually they choose to answer this question themselves, saying something like ‘evil corporations’. The answer, however, is you. You decide. In a society built on voluntary interactions, you hold all the power in the world. You can decide for yourself what you think of any good or service, you can decide for yourself how much you’re willing to pay for quality, you can decide how much of something you want to buy, and you can vote with your money every single time you buy something. But most importantly, the people with the most material wealth will be those who have pleased the most people – those who have made the greatest quantity of people around them happier, and those who have improved the lives of millions. Only by doing so can anybody hope to acquire wealth in a free society.

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I would like to add a note, because I know that people will be quick to point out that Milton Friedman supported Pinochet, that in the name of ‘capitalism’ the government has helped corporations make millions, given subsidies, increased income inequality, etc., etc. By capitalism I mean 100% deregulated, free market capitalism, in which the only role of government is to protect the freedom of individuals – so it doesn’t matter what people did in the name of capitalism, because that has nothing to do with the truth.