Thursday, November 03, 2011

A Few Thoughts on Greed :: Open Thread

As we're finding in the post on profits, it's difficult to discuss possible societal issues related to the economic crisis without agreeing on a definition of greed. I think my own working definition is ripe for tweaking, so I'll put it out there for critique as a means of hopefully finding a way to discuss it productively.

Before we get to the definition, I'd like to suggest we leave out whether "greed" itself is immoral or not. I think that's best left as a theological question. I'd also argue we agree it's not unethical in and of itself. It's a personal choice. And we in America are all about defending one's right to make personal choices. Of course, that doesn't mean others can't criticize that choice.

As for that definition, though, my working one operates around what separates merely wanting more from greed. I don't see wanting more as problematic on its own. I think it's a healthy part of human nature. I think it becomes unhealthy as it approaches hoarding (and at a certain point that's interrelated with greed), but in general, wanting more (even more than your neighbors or more than others might selfishly consider your fair share) is fine by me.

What separates wanting more from "greed" for me is defined by how one goes about it. By one's actions. Here I think we can discuss morality and ethics. Seeking more in an intelligent, legal, ethical, moral way is all well and good. But that pursuit approaches "greed" when one's actions approach the opposite and become stupid, illegal, unethical, or immoral. In other words, the consequences of one's actions must be considered in defining "greed." And, arguably, as long as no one (or thing) is being hurt by one's actions, no matter how much one accumulates, they're not being greedy.

While out there swimming, for example, I could drink down all the water from Lake Erie my stomach can handle, every day of my life, and--should the toxins not kill me--it most likely wouldn't make a bit of difference to any other living person (and probably not many other living creatures, other than the tiny creepy crawlies I inadvertently swallow). It would never reasonably be seen as "greedy." Because there's so much of it (and so few other people reasonably want it), I could never take more than my fair share.

Moving the discussion back to the economic crisis and the sorts of actions being examined as the source for our woes, clearly, while things are in motion, there are shade of gray as to whether this or that action is stupid or even unethical (I'd argue legal and moral are less gray, but...). But the results are now in, and I think everyone would agree that selling packages of toxic mortgages to unsuspecting customers who trusted you, securities you knew were likely to go bust, while also shorting those same securities is unethical behavior. There's no gray in there for me at all. That was greedy, pure and simple.

You can expand upon the theme here, though, and point to the greed of home buyers who accepted the mortgages they knew damn well they couldn't really afford. The "best practices" here are well established.

To get to the heart of the "greed" issue as it applies to both banks and home buyers, though, one need look no further than Ninja loans. Ninja loans may have been legally available, but only greedy people would think they were entitled to them. And only greedy banks would put their shareholders at rick by offering them.

At this point of the argument someone will inevitably point to the Community Reinvestment Act and insist that piece of legislation tied the banks' hands. They had no choice, the meme goes. They were only doing what an interfering government was making them do. This doesn't stand up to the evidence though:
In a 2003 research paper, economists at the Federal Reserve could not find clear evidence that the CRA increased lending and home ownership more in low income neighborhoods than in higher income ones.[84] A 2008 Competitive Enterprise Institute study resulted in a similar finding.[85]
Indeed, the law itself insists on sound practices:
The Act requires the appropriate federal financial supervisory agencies to encourage regulated financial institutions to help meet the credit needs of the local communities in which they are chartered, consistent with safe and sound operation (Section 802.) [emphasis mine]
More precisely:
The Community Reinvestment Act has encouraged banks to lend fairly and responsibly for over 30 years. The Community Reinvestment Act does not impose fines; it periodically examines FDIC-backed banks and issues them a CRA-compliance rating. [Community Reinvestment Act] To receive a high rating, banks must meet the financing needs of as many members of their community as possible and must not discriminate against racial and ethnic groups or certain neighborhoods. However, a bank cannot receive a high rating unless it is also maintaing “safe and sound banking practices.” [Community Reinvestment Act] In other words, the CRA requires banks to lend to working-class families and people of color, but only when those people have been deemed credit-worthy.
I'm not sure how, when the best practices for being credit worthy are so well established, anyone could argue that Ninja loans were anything other than an incredibly stupid (and therefore greedy) idea.

Again, to my mind, it's stupid and immoral actions that define greed. Not wanting profits, but wanting profits above all else, above reason, above what you know is honest and right.

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9 Comments:

Blogger Cathy said...

I think greed is wanting more than one is entitled to. Determining entitlement is the sticking point. Is greediness ever a virtue? I don't think so.

I find using synonyms for 'greed' helpful in talking about it. the word suffers from overuse.

11/03/2011 12:29:00 PM  
Anonymous Bernard Klevickas said...

Just boiling the problem down to greed seems over simplified to me. The problem is caused by a disconnect between the actions and a lack of concern of the result. This is often portrayed as greed, but there is a subtle difference in that the opportunity is too easily available to divest an action from its effect and individuals are prone to not look at the possible consequences. Corporate capitalism has succeeded in separating actions from consequences. If a CEO looks at the numbers and knows that he (most often, it is a he) can profit more from moving manufacturing overseas he does so, without care for the jobs lost locally. This isn't necessarily greed, as it may be linked to doing what is best for the company, the stockholders or the CEO's family, but not what may be best for the local workers. The system makes it easy for these types of decisions to take place.
In general if a CEO makes a bad decision in the company there is no bad consequence for the CEO. I do agree that a large part of the problem is the ability to focus on money (which is a transference of power) over other important values such as the environment, our children's futures, and the value of other peoples lives.

Also related:
if a financier is guaranteed safety from bad loans it becomes easier to be careless about the decisions.

If a radio-controlled drone can be flown over and kill someone without any harm to the pilot it separates the danger from the action.

If a bomber can drop bombs from the safety of their plane.

etc.

Those who, by birth or luck, have $1,000,000 or more in the bank can then use that money to safely leverage more money (here greed can lead to riskier gambling with the money, but if done sensibly a millionaire can rather easily be assured more money through careful investment) yet a person with $10 to their name will need that money to eat with and therefore is continually chasing after money for mere survival. Today we have many conveniences but less opportunity to get ahead. Of course, the common argument is that someone is lazy or not trying hard enough, and examples like Steve Jobs or Bill Gates are thrown around, but those are 2 people out of 6 billion. This type of optimistic fantasy keeps people in line thinking they may also be capable of one in 3 billion. Showing a lack of concern for all the other "lazy" billions of people out there.

The disconnect of "I can do this" is separated from "this results" through levels of bureaucracy, mechanization, and/or technology.

Think of the Beatles line: "I am he and you are we and we are all together", which is not communism but an acknowledgement that we are all human and more alike than different, while capitalism (the predatory corporate fascist kind) creates a false sense of entitlement that somehow one individuals decision (a CEO for instance) is worth more value than anyone else's and is safe from any consequences.

Occupy Wall Street is the beginning of a less hierarchical and more horizontal type of uprising (though attempts are being made to co-opt it). The connectedness of the 99% shows that we are all alike.

11/03/2011 01:37:00 PM  
Blogger Edward_ said...

Just boiling the problem down to greed seems over simplified to me.

Yes. Which is why I tried to clarify that this post stems from the need to define greed within a larger conversation about other issues. I hope that wasn't missed.

11/03/2011 02:05:00 PM  
Blogger Stefano W. Pasquini said...

Excellent post. Oh, I wish I was living in a democracy some time...

11/07/2011 03:25:00 AM  
Anonymous Franklin said...

I applaud your pragmatism. But stupid and immoral actions are indictable in themselves. It follows from your argument that intense feelings of greed are acceptable if they don't result in stupid or immoral actions.

11/08/2011 08:13:00 AM  
Blogger Edward_ said...

It follows from your argument that intense feelings of greed are acceptable if they don't result in stupid or immoral actions.

I hope it follows from my argument that intense feelings of greed are caused by stupid or immoral plans/actions...wanting more is not "greed" in my opinion...wanting more so much you'll do stupid or immoral things to get it is "greed."

11/08/2011 08:51:00 AM  
Anonymous Bernard Klevickas said...

Maybe you'll post this one:
Guardian Article

11/08/2011 11:11:00 AM  
Blogger Edward_ said...

I'll post any comment that remains on topic.

11/08/2011 11:14:00 AM  
Blogger Cathy said...

Ok, I admit that I'm greedy for attention and praise. I somehow think a lot of artists are. But I'm not going to grovel for it, I'm snobby that way.

This isn't something I'm proud of. I wish I were content with things as they are, but I want more.

I think the same logic applies to the having of money. More people wish to be among the wealthy than are pissed that all isn't equal. They just can't find a way to climb to the top of the heap.

Are these feelings wrong? I say no, because feelings are sacrosanct. That doesn't, however, mean we should applaud them.

11/08/2011 07:08:00 PM  

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