When I heard Michael Douglas, portraying Gordon Gekko in “Wall Street,” deliver the line, “Greed is good,” my date that evening was horrified. I, on the other hand, wanted to stand up and cheer. I totally understood what he was saying. Greed is good.
Last week, when Newt Gingrich, Rick Perry and Jonathan Huntsman ganged up on Mitt Romney for being a predatory capitalist during his tenure at Bain Capital, I assumed the posture of my date of 25 years ago; I was horrified.
When I use the term “greed,” I don’t mean the unfettered greed of Shylock in Shakespeare’s “The Merchant of Venice.” I’m talking about controlled greed -- greed that’s bridled by moderate, sensible regulation and (here’s that word again) the greed of free-market consumers and competitors. I submit that in order for the free market to function smoothly, greed isn’t just good -- it’s necessary.
Greed regulates capitalism, resulting in the availability of quality goods and services at reasonable prices. Greed is nothing more than self-interest. It’s in a business’ self-interest to charge as much as possible for its product. This desire is tempered by its consumers’ self-interest to spend as little as possible, as well as the self-interest of competitors to grab a share of the market by offering the same product at a lower price. Competing interests result in equilibrium.
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