Wednesday, January 04, 2006

The Economy of Greed

There is no way to get a good result from an economy that institutionalizes greed as an honorable motive and excuses waste and destruction as "acceptable costs."
– Wendell Berry


Patry Francis said...

That's what I call a spine tingling quote. Thanks, Sharon.

Sharon Hurlbut said...

It IS a great quote, isn't it? Sure got my attention. It's from a short interview in Preservation magazine (the March/April 2005 issue - I'm a little behind) about the concept of community. Berry has some very interesting thoughts, and he pulls no punches.

Locke said...

My take: 'Greed is not good'

In Australia, we have had many privatisations and demutualisations in the last twenty years. The changes in corporate structure were made for good reasons. The problem was that the sleepy government organizations and mutuals were too ineffecient. Workers could be lazy, because their jobs were secure, and there was no great incentive to work hard. The workers weren't serving others, but serving themselves - by being lazy.

So the corporate structures were changed, and these changes worked. Corporations now work for the profit of owners, and this profit is shared with workers. This potential for profit has driven managers to squeeze out inefficiencies with a view to their own gain. So the problem of laziness is no longer the problem in corporate Australia. We have a different problem.

You see, what has not changed is the inclination of the workers and managers to serve themselves rather than others. The difference is that workers are now driven by greed. Rather than laziness, the Australian form of self-service is the chase after the dollar. More and more, the work-practice of our labour force expresses their belief that greed is good. This is a problem, because work is not meant to be about greed, it is meant to be for service.

If we agree that greed is not good, can we cure this plague? We can't cure the heart of greed by adding more rules - but can we do something at a structural level? Socialism and communism manifestly fail, partly because communism involves reverting to the old government owned and run corporate structures. If we reverted to these, laziness would again triumph as the expression of workers' self-interest. So what can we do to tame our current spiral into materialism? One answer is that our hearts need changing, so that we want to serve others. That is the primary answer. But our hearts will never be changed completely - there will always be the tendency for people to serve themselves rather than others. So what structural change might we make to help us defeat the greed-is-good brigade?

I want to make a suggestion. It is a little detailed, so strap in. But it is a test for you, the reader. The test is this: If you reject my suggestion as bad, do you reject it because you really think that greed is good? If that is your reason, then in my opinion, you have failed this test.

So why not structure society so that more work must is others-centred: The maximum take home pay in any year is set at about $50000 per person (adjusted for family size, marital status etc.). Any extra that you earn is set aside into a 'superannuation-style' account (owned by you, but not accessible until a later date). This account may be used in certain circumstances: It can be used by the owner whenever their earnings drop below $50000 that year. The owner may use the account to top up that year's earnings to the maximum $50000 figure. The account may also be used as a deposit on a house (up to say $150000 can be used in this way over a lifetime). It may be used to donate funds to causes deemed not in the direct interest of the owner. The owner chooses where these donations go. These donations would be vetted by a randomly selected person from the community (with recourse to a second person if the first says no). These 'checkers' will confirm that the donation is indeed others-centred.

This system works against both the evils I have mentioned above. We retain the capitalism where corporate structures allow people to push hard for personal profit. This leaves the incentive for people to work hard: If someone wants to earn their lifetime of wage income in five years, they can try. So those looking to provide for themselves will still be motivated to work hard. The same goes for those aiming to make money for the benefit of others - they can make bundles and give it all away. So the 'left-wing' evils of sleepy mutuals and government organizations are avoided.

On the other hand, citizens can no longer work to spend millions on their own pleasures. This will not be possible. So those at the top of our corporations will have severely restricted ability to sacrifice others for their own benefit. The 'right-wing' evils of money-hungry stop-at-nothing tyrant bosses will be avoided. And so the problems of today will be mitigated (although not removed)

The details need to be worked out, but the point is simple: our work would become biased towards others-centred service.

Note that it would still be possible to be paid a million dollars a year. Those who want to earn such large sums and give the money away will stay in our country. Those who want to spend it all on themselves will leave. I think we'll do better without them.

Note that this is not rejection of capitalism. We would still have private ownership, free markets, and laissez faireism - the defining features of capitalism.

I'd love readers to post problems with this political structure, and to make it better. However, I finish with my original challenge: do you reject this system because you believe greed is good? If you do, you fail my test. For greed is not good, it is killing our country (and it's killing yours too.)

Matt Getty said...

Interesting . . . For me the question comes down to not "is greed good?" but "is greed inevitable?" And if so, are there not other equally strong (or even stronger) impulses that drive people?

I know studies have been done that claim to prove that once a U.S. family crosses the $50,000/year threshold more money does not equal more happiness, and I'm inclined to believe that's true. Also, I've heard that people who regularly volunteer report a higher level of happiness than those who don't. So it seems like there's at least the potential to institutionalize altruism.

Sharon Hurlbut said...

Locke, wow, what an interesting post. I can't imagine your proposal ever working here in the United States, however. We tend to be very protective of our right to "life, liberty, and the pursuit of happiness" and unfortunately, for a great many people today, happiness is equated with material possessions. Restricting the accumulation of money or things, therefore, would likely be viewed as an assault upon our most basic rights.

I would have to agree that greed is not good. I suspect it's not even terribly good for the greedy, since they can never be fully satisfied, but always want more, more, more. The heart of the matter for me is that we need to see a shift in values, so that the emphasis falls on how we live our lives and touch others rather than how many cars or boats or vacation homes we own. I think we need to build a greater sense of community in our towns and neighborhoods (and that concept, by the way, is at the heart of the interview from which this quote by Berry came). I think we need to connect with the people around us instead of just bumping into them at the discount superstore as we jostle for position in the checkout line.

Here in Oregon, the slogan "think global, act local" is a part of our daily lives, and we make conscious decisions about buying from stores supplied by local farmers, walking instead of driving, and maintaining a landscape that supports native plants and animals as well as people. They are small steps, but I hope they will move us in the right direction, however slowly.

Thanks for stopping by and sharing your thought-provoking post.

Sharon Hurlbut said...

Hi Matt! What an excellent question - is greed inevitable? I'd love to see an anthropological study on this. Perhaps I'll do a little research and post my results.