The Greed That Saves

Greed is a term that comes under a lot of fire, particularly these days with unemployment hitting double digits and budgets tight everywhere.  Yet, is anger toward greed really the solution.  After all, greed is a bit like information; it’s all about what gets done with it.  To blame greed for the present financial woes afflicting the world is too easy and simplistic.  Did greed play a role?  Absolutely.  Was it just the greed of a bunch of old white men in suits?  Absolutely not.  It was also the greed of middle managers and casual investors and housewives, who perpetually screamed for a better bottom line. 

The real problem at work is about the type of greed that led to this disaster.  Range of the moment greed brought the present calamity down on our collective heads.  Range of the moment greed is the kind of greed that says, “I need to be rich right now!”  It’s the kind of greed that leads to people invest in stocks for two weeks instead of twenty years.  It’s the kind of greed that drives people to sell stolen TVs off the back of trucks and the kind of greed that drives people to buy those TVs.  It’s a greed that looks no further than the moment of gratification.  This is the greed that created the disaster.  The irony is that an entirely different kind of greed will eventually solve the problems.

The greed under discussion so far is a greed that seeks something for nothing or next to nothing.  It is a greed that wants a maximum return for a minimum investment.  That is what the stock market is all about: the attempt to generate a maximum profit for a minimum investment.  After all, the investor exerts no effort beyond the initial investment.  They rarely work for the companies from which they buy stock.  They are banking on the intelligence of efforts of others to generate a return on investment. 

Perhaps this mindset is inevitable, but it wasn’t always that way.  The reality is likely a far more basic thing.  The culture that produced that mindset is one that has rarely wanted for anything.  It has largely gotten something for nothing.  Yet, earlier generations, such as the generations coming out of the Great Depression and its aftereffects, saw the world in an entirely different way.  Those were generations that had lived directly with a lack of basic needs or those who had experienced it directly.  These were people who understood that, to generate sufficient wealth to survive, one had to offer something for something. 

This brings the conversation back to what will ultimately solve the economic problem.  The kind of greed that will ultimately save the economy is the greed that would like to be rich now, but understands that it can be richer by waiting.  It is a greed that seeks to offer something for something.  This is the greed that sets people on the path of building a business that produces something.  This is the greed of the self-made millionaire.  This is the kind of greed possessed by those who do not rely on the efforts of others to produce while they expend no effort at all. 

When the new financial giants rise from the crumbling edifices of the current economic structure, they will have no tolerance for the complex and unjustified machinations of financial managers who look for new ways to manipulate the ones and zeros of imaginary markets.  These giants will demand exchange of something for something.  They will scorn those who believe in the fiction of something for nothing.