"The world runs on individuals pursuing their separate interests."
It seems like everybody is beating up on greed these days. In the wake of the AIG bonus scandal, pompous members of Congress, the Obama administration and the media are disparaging the very concept. It's time someone stands up for greed because without it, there would be no United States of America.
Wall Street, How much is enough
Greed – the desire to make a profit – is the engine that runs a free-market democracy, and that is precisely what President Barack Obama is trying to change. He wants to spread the wealth around so that people who are not greedy can have the same things in life as those who are. But here's the rub: Why should someone work hard to get an education, develop a skill and become successful, only to have government take away part of that success and hand it to someone with no initiative?
That's what the late economist Milton Friedman tried to get through to Phil Donahue in an amazing clip from 1979 posted on YouTube. Donahue was a big-time TV talk host at the time, and he brought Friedman on to confront him about capitalism:
"When you see around the globe, maldistribution of wealth, the desperate plight of millions of people in underdeveloped countries, when you see so few 'haves' and so many 'have-nots,' when you see the greed and the concentration of power, did you ever have a moment of doubt about capitalism and whether greed is a good thing to run on?"
Friedman did not hesitate with his answer: "Tell me, is there some society you know that doesn't run on greed? Do you think Russia doesn't run on greed? You think China doesn't run on greed?" And then Friedman whacked Donahue with this statement that should be in every economics text: "The world runs on individuals pursuing their separate interests."
Exactly. The difference is that here in America, the people are free to pursue their interests while in many societies around the globe, only government is. Many of those governments are corrupt. The more power they have to redistribute wealth, the more corrupt they are. Sometimes, as in the case of the Soviet Union, they collapse under the weight of the socialist system.