No Mr. Friedman, greed is not good
Insty is pushing this video of Milton Friedman on greed and capitalism. I've never seen Milton speak before and while I'm a great admirer of his position on the war on some drugs -- he's against it -- I just realized when he speaks live on general economics, he's really kind of an ass. In this clip, he proffers that greed is good and that all great achievements of capitalism were based on it. He further claims that greed-based capitalism is the best vehicle to lift impoverished peoples out of their miserable existence. He's dead wrong. Greed in fact, is the root cause of the failure of all economic models. Any one could work, from socialism to captialism, if you could eliminate the greed manifest in those who gain power and ultimately control of the systems. Greed by its nature takes too much for the few and leaves not enough for the many.
I'd posit that the great inventors like Einstein and Ford to use Friedman's examples, or Franklin or Edison to add more, weren't motivated by greed but by rather by the love of scientific inquiry. That they benefited financially was a side effect of their discoveries, not the driving force behind them. Their inventions were indeed born of virtue; the virtue of intellectual curiousity and a desire to better the lot of the common man.
Milton asks us in this clip to define greed. Easy. The difference between greed and enlightened self interest is like the difference between eating well and gluttony. The first will keep you healthy, the latter will kill you with excess, from consuming so much more than you need. Which is exactly what's happening to capitalism right now. [graphic]
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Labels: Corporatocracy, economy, History, society
posted by Libby Spencer at 5:30 PM
13 Comments:
Naomi Klein in The Shock Doctrine: The rise of disaster capitalism nailed it. For a total repudiation of Friedman and the Chicago School, this is essential reading.
actually Milton, in that very clip, did not in fact say either Einstein or ford acted in greed. They acted of free will in free-semi free markets. He stated that no bureaucracy can produce the results of free men. You also didn't take on his larger question of "what system doesn't run on greed?"
and that's the question I pose to you again. What grander system doesn't run on greed?
Again, you skirted the issue by saying "The difference between greed and enlightened self interest is like the difference between eating well and gluttony."
how do draw that line? Now obviously 1 an apple and a bowl of cereal is not to much, and 27 big macs is, but I predict a fairly large gray area in between. So again, where do you draw the line? and more importantly should the government draw that line for you?
Josh: where do you draw the line?
Clearly there is an arbitrary line between adolescence and adulthood, and age 21 doesn't quite cut it.
8pod, thank you for your succinct explanation. I'd agree Naomi is the authority on this.
I'd add for the benefit of Josh, my point is none of the models work because greed can't be quantified and it undermines the system every time. So yes, the government should be the one to impose top down regulation. Who else would do it? We're living with the effects of self regulation right now and it's not exactly working out well.
Libby, the savings & loan crisis of the late 1980s was the ghost of Meltdown Future. Too bad it took this long to open the next chapter. Too bad there are still Scrooges arguing laissez faire. No happy endings here!
Did you care to notice that it was Donahue who asked him about greed?
"Do you have any doubts about capitalism and whether greed is a good idea to run on?"
He gave him a direct answer...and you think that's bad...?
No Ulises, I think his answer was wrong.
Sorry, I don't mean to bother you and I don't really want to waste your time. But, I have to go back to the premise of Donahue question.
Donahue seems to imply that every one that acts of economic self interest is greedy. I mean, I've seen the video about three times now and is there for all to see.
It was a loaded question, and Mr. Friedman answered in kind. And because of that you said he was "kind of an ass".
Play the devil's advocate for a minute here and let's say you are Mr. Friedman. How would you've answered that question?
Ulises, any interviewer worth her/his salt is supposed to ask probing questions, and such questions are quite beside the point. I note from your blogger profile that you are in banking, a subject not unfamiliar to me.
The answer was wrong. Haven't you been paying attention to the turmoil in financial markets?
I probably need to check my profile. I'm not into banking anymore, but I used to work in a bank operations division, taking care of ATM machines and POS terminals.
But yes, I have been paying very close attention. We all have been playing with money that we didn't have and got burned. Now the government thinks that the best way to correct that is to throw even more money (that we still don't have) to the problem.
By the way, I still think that Mr. Friedman answer was appropiate. I'm afraid that we'll going to have to agree to disagree on this one.
Regards,
Ulises
Ulises, I don't think Donohue was saying EVERYONE who acts in enlightened self interest is greedy, I took it to mean the same thing I'm saying in the post, that greedy players destroyed the system. And I probably that clear in the post, but it was Milton's condescending manner that makes me think he's an ass. He struck me as arrogant. His answer was simply wrong, his attitude was rude I thought.
As for how I would answer the question, well, see the post. That's my answer.
8pod, thanks for the support.
Ulises: Now the government thinks that the best way to correct that is to throw even more money (that we still don't have) to the problem.
A nation, a government is a sovereign entity whose books do not balance in the same way as a corporation or individual does. A former mentor of mine used to say that countries may have a liquidity crisis, or crises in confidence, but never truly go bankrupt due to the nature of sovereignty. These are the lessons learned from the Third World Debt crises of the early 1980s.
Today, those same third world debtors (Latin American countries) are in better financial shape than the U.S. Sometimes, a country needs to increase public debt to stave off disaster ... like now for instance. Inflationary pressures unleashed by public debt are better handled by FED monetary policy, but no amount of FED tinkering can fix this crisis. That is why massive spending is the only viable option left ... meanwhile the Republican noise machine is playing "chicken" with our financial future.
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