Monday, January 9, 2017

REPOST: Stossel on Greed


  1. Greed can be defined as the pursuit of self-interest in the free market. Stossel’s closer look at greed brings to light the argument of whether greed is a positive or a negative. Free Market is important to our economy as it creates employment opportunities and helps drive economic growth. It also helps to drive advances in technology. If Jobs did not have the desire to capture market share of the technology market, our world may be functioning very differently. Greed promotes competition. Competition keeps prices affordable. Competition also keeps business focused on doing what is right for the consumer. Business who fail to align with consumers will lose to business who do.
    Most people experience greed in their life. They want the best for themselves and their families. Is that not being greedy? In the U.S. economy, one has the ability and the right to be financially successful (greedy) as long as it is done so legally. This is a good thing. In the video, Stossel asks ‘Are rich people ‘Robber Barons’? Rich people may have become rich because they were greedy but their greed created and supported the economy. Carnegie comes to mind. His greed to develop and expand the steel industry led to his ability to establish free libraries across the country so that others can have access to knowledge. Greed may be interpreted as a negative but in many cases it leads to positive outcomes.

  2. When businesses or individuals grow their wealth, it is referred to as greed by the critics of capitalism. But have they stop to think what the world would be like without this so-called greed. The industrial revolution was because of capitalism, the sophisticated techniques and state of the art equipment we use to diagnose and treat diseases is because of capitalism, the ability to learn in a virtual classroom is because of capitalism, and Ford’s drive and passion to mass produce cars which lead to the invention of the assembly line was a result of capitalism. Now stop and think about a world without all these and many other capitalist endeavors. For example, in 1895 Rontgen discovered x-rays and within one year the first radiology department was opened in Glasgow (Waters, 2011). Since then through capitalism x-ray, CT scan and radiation therapy equipment are available worldwide. Where would the manufacturing industry be, in terms of supplying society’s need, without the assembly line. The biggest advantage of capitalism is that it creates wealth by letting people follow their self-interests (Froeb, McCann, Shor & Ward, 2016).
    When a business that is already profitable decides to increase its profit margin by expanding it is satisfying a self-interest and in so doing it also provides wealth for others by creating jobs, increasing the value of its stock (increasing stockholders’ wealth), and increasing investors returns. There is a subtle difference between self-interest and selfishness with respect to capitalism. According to Adam Smith, the father of capitalism, “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest” (Richards, 2009). In a free market, we all have the option to increase our wealth legally. Many of us accumulate assets that are not working for us like the excessive number of shoes in our closets that we don’t use. How much interest do you gain on those shoes? However, if you should sell them to someone who values them more (mutually beneficial transaction) and invest the proceeds you create wealth. Wealth is created when assets move from a lower- to higher-valued uses (Froeb et al, 2016).
    In Stossel’s Video Mother Theresa was compared to an entrepreneur and surprisingly the entrepreneur was cited as having done more good than Mother Theresa. That is not to say I am not a supporter of altruism, quite the contrary. Altruism is germane to the corporate social responsibility (CSR) of businesses. But isn’t it better to teach a man to grow his own food so he will never be hungry again than to feed him temporarily? So, critics the hypocritical consumers of capitalism, you have a choice Capitalism or Altruism? “Capitalism and altruism are incompatible, they are philosophical opposites and therefore cannot exist in the same man or the same society” (Richards, 2009). Moreover, altruism resembles socialism a system that our society abhors?