|
Greed can also be interchanged with the less pejoritive 'self-interest'. People are inherently self-interested. They also display interest in others closest to them (eg. family and friends) in a lesser fashion, with that interest diminishing the further the 'other' is away from them (be it geographically, culturally, etc). It isn't that it is right or wrong, but rather, the way it is. Economics is partly about harnessing these interests in a positive way.
The independence of government and business during the GFC and European debt crisis has been under-reported, imo. Many want to blame business, not realising that government's were at the root of both problems through lack of sensible, rational regulation. The US government interfered in the housing market for social-democratic purposes, oestensibly to create more home ownership amongst the poor, but ultimately distorted the market so much that it went through a government-instigated boom. Lot's of unsustainable lending that was enabled, and sometimes enforced, by government regulation created the artificial boom, which created the inevitable crash. Government then furthered the problem by not allowing those businesses who voluntarily made bad investments to collapse, instead propping up their failure with vast amounts of government money. What started as an innocent market intervention created catastrophe.
The European debt crisis is again, more to do with government than business. Greece has never maintained a stable, honest economic system. Rife corruption and massive government handouts created a vast disparity between income and expenditure for the Greek government. Thus, nobody would loan them money at low interest rates (because of doubts over their ability to repay). When Greece joined the European Union, they were given access to loans at the same low interest rates as given to more economically responsible countries such as Germany. Thus, their incompetent government, instead of being logically punished for lack of financial prudence, now started borrowing vast amounts of money at artificially low interest rates. With government not acting responsibly, and now spending vastly more than they could hope to recieve in income, they essentially went broke. And again, to make matters far worse (just like during the GFC), other European governments are now preparing to spend vast sums of money essentially rewarding economic and regulatory incompetence. Rather than allow Greece to collapse as an example to the other near-failing Euro states in similar positions (Portugal, Spain, Italy), it now sends the message that you can be irresponsible, create economic catastrophe and not bear the full consequences of those actions.
Whilst there is a preponderence amongst modern humans to rely on the concept of government as benevolent and 'uncorrupted by profit', government is often the worst enemy of it's people when it comes to intervening in market's for 'humane' purposes. They truly do manage to create massive economic problems that could have been fixed a long time ago if rational economics had been applied in the first place, recognising the massive risk that seemingly innocuous market interventions by government can create. We need to be a lot more critical of government and it's role in society and the economy. People's interests, and their individual failures are isolated and do not cause society to fall when they do. Governments, due to their wide-range powerful nature and aversion to rational, less-government economics, can fail and do so spectacularly. Whilst it may be sad when somebody on a low income cannot get a home loan, was the GFC a worthy price to pay to 'fix' that problem? Whilst it may have been sad that Greeks might have had to work until 65, pay actual taxes and recieve realistic pensions, was the price of 'fixing' this problem worth having a European-wide debt crisis?
|
