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The Virtue of Selfishness: Using Reason to Realize One’s Full Potential

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Wow. It seems as if last week’s article caused quite a stir amongst the more fiscally leftist set here at Blogcritics. I am sorry that I was unable to respond to my readers’ comments on an individual basis, but as I often say in many of my articles, my daily schedule is rather full outside of my column.

When I finally got the chance to read some of what was said, though, the thought occurred to me that many who read my piece simply did not understand my underlying point: that the desire for wealth, whether it be in either or both of the material or non-material forms, is not a negative feeling, but a positive one. Rational greed can only be described as the deep, ceaseless yearning for personal improvement at virtually every level and should not be ignored, but considered and acted upon in a manner consistent with the universal non-aggression principle. Ultimately, if pursued in the correct fashion, one’s greed should lead him or her to true happiness and fulfillment in life. It is the denial of that which makes one happy that will undoubtedly lead to mental, psychological, and quite possibly, physical turmoil.

That being said, I strongly recommend that those who are still in total disagreement with my ideas on this matter consider the following; say there is an apple farmer who has had a failing crop for the past few seasons. Many of the other farmers in his community are in the same boat, and there appears to be no hope on the horizon. However, one day he discovers a genetically modified seed that is capable of withstanding the harsh climate which his orchards are currently experiencing. Exactly how he discovers the seed is unimportant; but when faced with the choice of sharing his finding with his friends and neighbors, which would most certainly help them out of their respective hard times, or keeping it to himself, he opts to do the latter. Why? Because if he does so, then he will have the only successful apple growing operation in the vicinity and be able to take full advantage of the supply and demand model of economics. Once this is done, he and his loved ones will return to the comfortable standard of living which they once knew and all will be well for them. This is an example of rational greed in action and how it can better the lives of those who choose to implement it.

If, by now, any of my readers still do not have a fairly basic understanding of where I am coming from on the concept of rational greed  (or perhaps, as some might choose to describe it, the virtue of selfishness), then they probably never will and simply cannot understand why so many people in our society are audacious enough to object to having their income taxes being raised in order to provide for the “common good”.

Oh, well. Logic and reason simply are not everyone’s cup of tea, I suppose.

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About Joseph F. Cotto

  • Baronius

    For what it’s worth, a person can accept the profit motive without embracing greed. There’s nothing immoral about the pursuit of wealth appropriate to one’s station in life. The use of the terms “selfishness” and “greed” seems designed to provoke a reaction. I think that Randers are trying to shock the squares.

  • Doug Hunter

    When stripped down, money and wealth are good things, which are why they have remained as goals and part of society for so long. At it’s base, money is simply a chit that says ‘I’ve done something good, provided a good or service, to someone’. Having lots of money means you’ve given lots of people lot’s of things that they wanted and asked for less (not spent it) in return. The lure of money entices an individual to find new, better, and creative ways to serve society. In the article’s example, perhaps if their wasn’t a monetary reward the farmer would not have went through the effort to discover the better seed and instead would have spent that time with his family, etc.

    The execution and reality is much more complex, but the underlying value as a measure of how much one has done or contributed to society still plays a role.

  • Deano

    It might be helpful to have someone with stronger economics background to comment here but I’ll drop in my two cents worth.

    I don’t think most economists generally oppose the concept of economic greed as a primary driver in economic theory – they would probably choose a less perjorative term like rational economic self-interest – but the issue is not rational economic self-interest as a driver, but whether an unregulated, open-ended system with no innate limitations or restrictions to that economic self-interest, is sustainable, laudable and desireable in a systemic way.

    Economic self-interest is not necessarily a happy benign force. It creates and drives both expected and unexpected results. It can drive open capital markets, entrepeneurial behavior, economic growth and new technology, but it also drives short-term focus, unexpected consequences and collectively suicidal behaviors like the mortgage crisis where you had firms recommending specific investments to clients that they not only knew would tank, but had a financial gain pending for the firm in having them tank.

    “Rational greed” may be fine as a driving force, but it needs to be balanced by the social concept of “the commons” – what collectively as a society is required for a market to effectively function – transparency, trust, legal restrictions and systems, stock and asset value, joint ownership, regulatory authority that sets limits or penalties on criminal or anti-ethical activities.

    The mortgage crisis pretty aptly demonstrated the results of financial market deregulation and unchecked “rational greed”.

  • Doug Hunter

    “It might be helpful to have someone with stronger economics background”

    Like the regulators and financial gurus that led us into the most recent crisis? No thanks. Backgrounds just lead to groupthink and long boring comments.

  • Deano

    Yes…sure would be horrible to have someone that knew what they were talking about sounding off at BC…

  • Jordan Richardson

    Backgrounds just lead to groupthink and long boring comments.

    Uh…

  • Baronius

    “the issue is not rational economic self-interest as a driver, but whether an unregulated, open-ended system with no innate limitations or restrictions to that economic self-interest, is sustainable, laudable and desireable in a systemic way”

    Deano, that’s an issue, but it’s not *the* issue. It’s not the topic of this article. The merit of profit-driven markets is worth noting every now and then.

    “The mortgage crisis pretty aptly demonstrated the results of financial market deregulation and unchecked “rational greed”.”

    I kind of don’t agree, sorta. At the individual level, loans were made by overregulated banks who were discouraged from turning down anyone, and taken by borrowers who weren’t rational. At the international level, the loans were packaged by misregulated institutions and bought by irrational investors. It’s a lot more complicated than you (or I) are depicting it, and the identity of the villains of the story isn’t clear.

  • Deano

    Deano, that’s an issue, but it’s not *the* issue. It’s not the topic of this article. The merit of profit-driven markets is worth noting every now and then.

    As is the merit of regulating said profit-driven markets so they don’t eat themselves…

    At the individual level, loans were made by overregulated banks who were discouraged from turning down anyone, and taken by borrowers who weren’t rational.

    Yeah, well…not really. The banks and mortgage companies saw opportunity in shoving mortgages out the door as you could re-package up the mortgages as a derivatives and *make money* off them by selling them off to instituational investors, funds etc. You could also get loans against the value of the mortgages which you could then invest in other ways. The banks saw a revenue stream and followed it without any clear idea of where it would lead. Individual homeowners were also driven by their supposedly “rational” greed which made them try to leverage cheap loans (“yaaay! free money!”) to the maximum.

    At the international level, the loans were packaged by misregulated institutions and bought by irrational investors.

    Again, the institutions that packaged up the loans *made money* on it – as did the individual traders and money managers who were rewarded for pushing forward these investments and often for purchasing the investments. It was unchecked greed that drove the problem. Deregulation was just one of the enablers.

    I think you can appreciate the driving impact and energy that greed puts into an economy but as I said, you also need to balance it against it’s destructive potential. You can be a gourmet without being a glutton.

  • Baronius

    Deano – So I just looked up the word “rationality” in an online economics dictionary, and it’s defined as “acting in one’s perceived best interest”. I was using the word wrong. So let me retract my earlier statement and say instead that both the borrowers and investors were acting rationally, but stupidly. It doesn’t take a great deal of sense to realize that you shouldn’t take out a loan you can’t pay back. Likewise, it doesn’t take much sense to realize you shouldn’t invest in loans that aren’t going to be paid back. Both actions are rational in that the actors are behaving in their perceived self-interest, but they were being dumber than chimps.

    That being said, I don’t see how you can consider the markets under-regulated. The loan officers were over-regulated into giving out bad loans, and the credit markets were sloppily regulated.

  • Doug Hunter

    “acting in ones PERCEIVED best interest”

    Sorta makes the definition pointless to me.

  • Deano

    People generally do what they are rewarded for doing in any type of compensation program. The loan officers and the bank were not worried about the defaults on the loans because they could package up the risk and sell it off to other investors – they made money off of the action of supplying the loan, not the loan itself, so the actual content of the loan was largely irrelevant. The bad loans became a commodity to be sold. They were financially incentivized to issue as many as possible, not regulated to do so. The market demand drove the stupidity, not excessive regulation.

  • http://blogcritics.org/writers/dr-dreadful/ Dr Dreadful

    Agree with Baronius in comment 1. What Cotto describes is not greed, whether rational (an oxymoron) or not.

    If rational greed is what he wants to call it, then fine, but it’s just semantics. A bit like calling a homicide an expedited life termination.

  • http://blogcritics.org/writers/dr-dreadful/ Dr Dreadful

    Sorta makes the definition pointless to me.

    Well, he did say it was an economics dictionary.

    For me that says a lot about economists, but interpret it as you will.

  • zingzing

    doug: “Having lots of money means you’ve given lots of people lot’s of things that they wanted and asked for less (not spent it) in return.”

    well, maybe. but often not. wall street tycoons don’t really do anything except turn money into more money (and they do it well), thieves just steal shit, despots take without giving back, suing somebody may net you a lot of cash for having created nothing… the list goes on. there are lots of ways to have lots of money without making one contribution to society.

  • Doug Hunter

    #14

    Everything you said is absolutely true and the list does go on, including the fraud and misrepresentation at the heart of the recent financial crisis.