In our capitalist society, we recognize that greed is an inherent part of human nature, and try to provide incentives to channel it in socially productive ways. This has led to a sensibility that greed is not simply inherent, but actually moral. The crudest form of this sensibility, which you heard a lot in the 1980s, but less so now, is, "Greed is good." I've actually had people tell me that this was Adam Smith's position, which indicates that the speaker has never read The Theory of Moral Sentiments.

What has become, if anything, more common is a subtle conflation of what is legal with what is moral. Matt Yglesias has a post today, not his first on the subject, making the argument that people enforcing contracts in a way that maximizes their profit is not necessarily moral behavior. In fact, such greed can be extremely immoral, even though we allow it.

Roughly speaking, I agree with Yglesias. I think that there is another element to it, which hearkens back to my point in the Arlen Specter post that moral imperatives are not the same for all actors, or even for the same actor in different roles that they play. I think that a case can be made that, for a publicly held corporation, the moral imperative is to maximize profit regardless of other consequences. Of course, corporations aren't people, except in the most narrow legal sense, and so they can't have moral imperatives. They devolve to the corporate officers, such as the CEO and the board of directors. For these officers, there is an ethical requirement to be greedy. This extends beyond just publicly held corporations. The hedge funds Yglesias discusses have the same issue, because their reason for existence is to maximize returns for their investors.

Just as with the politician in my last example, though, these officers are also individual human beings. As such, they are also subject to the same moral imperatives that the rest of us are, in which greed is not a virtue, but rather a flaw that we tolerate. What has happened is that this second set of moral imperatives have been lost in the fog of the first. We have built an ethos in which we pretend that a CEO, or the manager of a hedge fund, should behave under a system of ethics that sees that role as the only role that the human being in question plays.

This is destructive. Balancing different sets of imperatives is complicated, hard, and extremely difficult to evaluate. Tough. It needs to be done. We can't have powerful individuals operating as if the morality of individuals does not apply to them. Life is full of balances and trade offs that must be made. This is one of them.

Of course, this also touches on a complaint I made here a while back that Greed, or Avarice, if you prefer, is the only one of the deadly sins that free market absolutists want to take into account in their system. They sometimes make room for Wrath, but that's not enough. This is warped, and produces a society that is inherently unstable. (It's also an example of how my posts can ramble and escape the original subject matter, but let that pass.)

Sloth needs to be accounted for. This is, in the small world way that posts unintentionally relate back to each other, a part of that whole hatred of Europe that the right wing has. By building a system around greed, we have exalted GDP growth above all other measures by which we measure societal success. Europe, on the other hand, has made a fairly conscious decision to exchange some potential economic growth for things like longer vacations and shorter work weeks. Some of the wealth they have accumulated is additional leisure time, and, make no mistake, this is a form of wealth, even though it doesn't get measured as a positive in typical economic statistics.

I won't really get into Lust, because its opponents generally don't argue against it on economic grounds. I don't want to stray too far from my original purpose.

The most important of the sins, in an economic sense, that needs to be accommodated is Envy. Like it or not, Envy is a very real part of human nature. I can put together some practical reasons why excessive disparity in wealth and income is a bad thing. Beyond those, though, is that Envy must be accounted for. The have-nots are going to envy the haves. If you let this build up enough, it can and will tear society apart. Even if it doesn't lead to violent revolution, it can produce some extreme economic inefficiencies as the haves spend a lot of money, not on anything productive, but simply protecting what they have from those that don't have it.

Leftist governmental impulses are the most obvious way to take Envy into consideration. Envy is best dealt with in the political sphere. Anyone who believes in the free market because it turns a vice into something that benefits society really should, if they are intellectually honest, recognize that they have to make other concessions to human nature. An awful lot of them don't, though, and consider any such concession as tolerance of evil. One might think that they have a Greed inspired motive for thinking that only their own sin should get a pass.

For my own part, I try to be flexible on everyone else's sins in the hopes that they will reciprocate on my big one, which is neither Greed nor Envy.