Greed is a deadly sin perhaps, but it helps drive our economy

Today in The Australian

Anyone who has followed the evidence being given in the financial services royal commission will not be surprised that Kenneth Hayne refers to “greed” more than 50 times in the interim report.

 

About Henry Ergas

Henry Ergas AO is a columnist for The Australian. From 2009 to 2015 he was Senior Economic Adviser to Deloitte Australia and from 2009 to 2017 was Professor of Infrastructure Economics at the University of Wollongong’s SMART Infrastructure Facility. He joined SMART and Deloitte after working as a consultant economist at NECG, CRA International and Concept Economics. Prior to that, he was an economist at the OECD in Paris from the late 1970s until the early 1990s. At the OECD, he headed the Secretary-General’s Task Force on Structural Adjustment (1984-1987), which concentrated on improving the efficiency of government policies in a wide range of areas, and was subsequently Counsellor for Structural Policy in the Economics Department. He has taught at a range of universities, undertaken a number of government inquiries and served as a Lay Member of the New Zealand High Court. In 2016, he was made an Officer in the Order of Australia.
This entry was posted in Uncategorized. Bookmark the permalink.

39 Responses to Greed is a deadly sin perhaps, but it helps drive our economy

  1. 2dogs

    Am I supposed to accept that a report that uses such pejoratives is somehow authoritative?

  2. RobK

    ……but it helps drive our economy
    Mostly only to the extent that it requires regulation. The economy would do fine without it although it would be some kind of utopia.

  3. md

    And what would a royal commission into the conduct of politicians and their parties show, especially since they have exempted themselves from all of the ‘fair play’ legislation?

  4. Fat Tony

    md
    #2831924, posted on October 5, 2018 at 6:45 am
    And what would a royal commission into the conduct of politicians and their parties show, especially since they have exempted themselves from all of the ‘fair play’ legislation?

    It would be interesting to show how and from where all the politicians’ fortunes came.
    That would be a Royal Commission worth having.

  5. .

    Greed is fine. It is how you conduct yourself that matters.

  6. John Constantine

    The australian economy is being driven by unanswerable and undeniable overwhelming grief and distress.

    Their activist left is so blinded with murderous enragement that they are driving the entire economy over the cliff, and bloody well gloating while they do it.

    https://www.youtube.com/watch?v=4z88U915uq8

  7. Roger

    There’s no perhaps about it, Henry.

    Legitimate self-interest drives the economy; on that there is no argument between Jesus and Adam Smith.

    Greed is a moral failing which is not intrinsic to capitalism but occurs in all economic systems because it is a negative feature of fallen human nature.

  8. Roger

    Also, while Weber’s thesis has been subject to criticism, his essential insight that in northern Europe the investment of profit rather than its consumption due to religious strictures against greed accounts for the region’s rapid economic development still has a ring of truth to it.

  9. Bones

    As to greed……can an insider confirm or deny that counsel assisting a commissioner are paid a full daily rate rather than a daily rate discounted for the length of their appointment.

  10. RobK

    Roger at9.03,
    Thanks, I was trying to find the words to say pretty much that.

  11. Roger

    Roger at9.03,
    Thanks, I was trying to find the words to say pretty much that.

    You’re welcome, Rob.

  12. Iampeter

    The virtues of productiveness and creativity is what drives our economy, not greed.

    Greed is what drives socialism.

    Conceding the ethical battle to leftists is why the left is always winning.

  13. Infidel Tiger

    I agree with Iampeter.

  14. Tel

    Greed is fine. It is how you conduct yourself that matters.

    None of the 10 commandments outlaw greed, but the 10th commandment outlaws envy.

    If you don’t have much then there’s three basic options:
    [1] just be satisfied with not having much (the Buddhist position, similar to stoicism)
    [2] do something productive to get more (the Capitalist approach, which is greed)
    [3] grab what the other guy has (the Socialist approach, which is envy)

    The third option is highly destructive if everyone does it.

  15. RobK

    The virtues of productiveness and creativity is what drives our economy, not greed.
    Well said.

  16. max

    “Greed is a deadly sin perhaps, but it helps drive our economy”

    Self-Interest Is Not greed or selfishness

  17. duncanm

    Two things drive the destructive path to socialism: greed and envy.

  18. Roger

    Two things drive the destructive path to socialism: greed and envy.

    Envy being predominant, which is why attempts to wed socialism and Christianity are ill conceived, if not fraudulent: “You shall not covet…”.

    The Bible also assumes the right to private property and protects that right with the command “You shall not steal.”

  19. JohnA

    Tel #2832042, posted on October 5, 2018, at 9:59 am

    Greed is fine. It is how you conduct yourself that matters.

    None of the 10 commandments outlaw greed, but the 10th commandment outlaws envy.

    Col 3:5 “put to death, therefore, whatever belongs to your earthly nature…and greed, which is idolatry”
    It is contrary to the First Commandment, but as others have already said, capitalism is not greed.

  20. Dr Fred Lenin

    Greed is good ,as Hawke. Keating , rudd,turnbulll ,shorten text are. Greedy pack of bastards . Alp politicians know a bt about it .

  21. [2] do something productive to get more (the Capitalist approach, which is greed)

    No, greed has never been understood in such a manner. Greed has always been understood as an excessive desire for more. In fact, greed is inimical to capitalism because it ties up funds that would better be engaged if in some productive endeavour, whether research, production, whathaveyou.

  22. Tel

    Who gets to decide what is “excessive” ?

    Who gets to decide which endeavour is “productive” ?

    Seems like this comes back to the basic concept of ownership, and if you are going to have property rights then you are stuck with trusting the owner of that property to make choices about what the resources are used for. Given there is no universal definition of “productive” we are stuck with the tautology that whatever the owner does must be the most productive usage.

  23. I’d rather be greedy under capitalism than hungry under socialism.

  24. AH

    Am I supposed to accept that a report that uses such pejoratives is somehow authoritative?

    I agree, I wasn’t especially following this RC, but this comment about greed demolished their credibility in my eyes.

    Greed is occurs within the confines of the person, it’s not something that can be policed. Murder is murder even if you are motivated by the highest virtues. If someone performs a lawful act, but in their heart they are motivated by greed, it doesn’t make their action unlawful.

    Self interest is obviously and correctly the motivation of everyone, to call it greed in some circumstances really is a pejorative. And to attempt to police greed would be entering into the territory of policing thought crime.

    The commission should be looking at the private property rights of the people involved, were people’s rights infringed? It should be looking at whether or not the contracts entered into were valid. It should be looking at the role that money supply expansion facilitated by the RBA plays in promoting malinvestment. It should be looking at distortions in price signals that encourge over-expansion of certain speculative elements of the economy.

    The system should be robust enough that greed, a basic human experience, can occur without problem. Pointing the finger at greed is really getting into a territory of saying that natural human behaviour is somehow what is wrong rather than to question the ediface of the state

  25. Boambee John

    Greed is climate “scientists” who have told us multiple times that “the science is in” wanting ever more research grants to study that “science” even further.

    Greed is politicians paid hundreds of thousands a year wanting the taxpayer to cover the costs of their home internet. Neither improves the economy.

  26. RobK

    Who gets to decide what is “excessive” ?

    Who gets to decide which endeavour is “productive” ?


    Q1) Politics.
    Q2) Markets

  27. Who gets to decide what is “excessive” ?

    Are you really suggesting that we are unable to determine what is excessive or what is deficient in this regard? It seems to me that businessmen have a pretty clear idea of what these words mean when considering business proposals. But that is beside the point, merely wanting more of X or Y has never been what people have meant by greedy. It has always meant desiring more of something then is reasonable in the circumstance. Context matters because what is excessive or deficient or optimal will depend on the thing itself and its purpose.

  28. .

    Let’s define “greed” first.

    My view is that there is nothing wrong with it, but some people can’t handle their own greed.

  29. stackja

    A ‘good’ return on investment once was seen as fair. Then some decided ‘good’ wasn’t enough. AGW/GFC scams added on.

  30. .

    Limiting returns is a bad idea.

    If there was a cap on returns we would not get innovation or capital flows.

    On the other hand, doctor’s salaries have grown considerably since the 1970s and the beginning of Medicare and “free” health care.

  31. dot, it’s an excessive desire for something. Sure, if its stamp collecting it’s not earth-shattering, but when its governments wanting excessive power, it is.

  32. stackja

    A real open free market should create limits. But how many deals done by the few?

  33. Aquinas on greed (covetousness) is excellent:

    I answer that, In whatever things good consists in a due measure, evil must of necessity ensue through excess or deficiency of that measure. Now in all things that are for an end, the good consists in a certain measure: since whatever is directed to an end must needs be commensurate with the end, as, for instance, medicine is commensurate with health, as the Philosopher observes (Polit. i, 6). External goods come under the head of things useful for an end, as stated above (II-II:117:3; I-II:02:1). Hence it must needs be that man’s good in their respect consists in a certain measure, in other words, that man seeks, according to a certain measure, to have external riches, in so far as they are necessary for him to live in keeping with his condition of life. Wherefore it will be a sin for him to exceed this measure, by wishing to acquire or keep them immoderately. This is what is meant by covetousness, which is defined as “immoderate love of possessing.” It is therefore evident that covetousness is a sin.

  34. .

    Competition, stackja.

    Hence it must needs be that man’s good in their respect consists in a certain measure, in other words, that man seeks, according to a certain measure, to have external riches, in so far as they are necessary for him to live in keeping with his condition of life.

    That sounds very medieval.

    This is what is meant by covetousness, which is defined as “immoderate love of possessing.”

    Very subjective. Hence why mortals should not really judge each other on these sorts of things.

    Some wealthy people have gone on to be great philanthropists. I don’t mean the phoney once-you’ve-made-it-give-back which is nauseating.

    Some people can seek billions and not hurt people or turn into arseholes. They can have very covetous personalities but do so in moderation to their behaviour with other people. Some are dreamers that want to be philanthropists.

    Some people cannot treat each other decently merely by seeking a promotion in a rather low-level job, or even when it comes to applying for work.

    Some people merely aim to be a welfare mooch and have an immoderate attitude to others over $300 a week.

  35. his condition of life.

    That sounds very medieval.

    No, it just refers to their situation, which might include their profession, their location, the size of their family, and so on. He didn’t say station, and even if he did, that is not solely a medieval notion.

    This is what is meant by covetousness, which is defined as “immoderate love of possessing.”

    Very subjective. Hence why mortals should not really judge each other on these sorts of things.

    What is subjective about it? Immoderation is easy to discern. In eating, drinking, and so on. Seriously, we have no problem discerning what is deficient, reasonable, or excessive in all manner of engagements, none of which is hopelessly subjective. If a person’s family is near ruins and a father refuses to sell his beloved Aston Martin in order to avoid bankruptcy he is clearly suffering the vice of greed.

    Some wealthy people have gone on to be great philanthropists. I don’t mean the phoney once-you’ve-made-it-give-back which is nauseating.

    Yes, but I’m not arguing that all wealthy people are greedy.

  36. .

    Like I suspected, we’re talking about different things. I think the meaning of greed has changed from an unbalanced desire to mean ambition, basically.

    I’m defending ambition, really.

  37. Old Boot

    How many people have really bothered to read the Haynes Interim report? The Executive Summary says that greed is mainly exemplified by “how could you take money from dead people”. But there’s only a very minor reference to “died” or “dead” situation in a word search of other volumes of this report. And not even the main point of that particular case anyway. Just goes to show how identity politics has corrupted even the Royal Commission “summary” process. They must have thought they needed an emotive tagline as a headline. But they didn’t even bother to be sure they are on solid ground for it in the rest of their documentation trail. Sloppy and lazy – maybe this will now be fixed the final report?

  38. .

    Well DB if you’re still there, I’d even say that vainglory stunts one’s true potential.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.